P&O warns price war with Eurotunnel could hit jobs
Ferry Online Travel News 09/08/2010
Ferry operator says heavy competition from Eurotunnel forcing major cost cutting.
Ferry operator P&O has warned that it risks having to make major cost reductions as a result of a massive attack on price by competitors including Eurotunnel. Though the price war is focused on the lucrative short-haul sea business, primarily the Dover-Calais ferry route, the competition has seriously weakened all aspects of P&O’s operations.
The alarm was raised by P&O chief executive Helen Deeble, who warned staff via an internal memo that management would be required to give ‘urgent attention’ to cutting costs across the company. She said the company’s board was considering all options but she did not specify what changes would be made or the size of any potential cuts.
She said the price war that is hurting P&O is being waged largely by Eurotunnel. Eurotunnel is eager to recover market share it lost following a tunnel fire late in 2008. As a result, Eurotunnel has slashed shipping rates.
However, it is thought likely that cuts will involve some of P&O’s 4,000-strong workforce being made redundant. The short-sea division employs half of those staff. P&O is already in talks with trade unions and the European Works Council. A company spokesman said a staff update could be expected before October.
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