After eight years of rough economic seas, Greece’s major coastal shipping companies are sailing at half their size and under major financial pressure, but still managing to carve out some profits. Even after their extensive restructuring due to the domestic recession and competition from air transport, however, they are still at risk.
Besides major fluctuations in fuel prices, the challenges remain significant as the sector requires sizable investments for the fleet to comply with the new regulatory requirements the international environment imposes.
In the last few years the four majors – Minoan Lines, ANEK, Hellenic Seaways and Attica Group have only been using 45 vessels, compared to 2001 when they had 125 ships. Even in comparison to 2009 the fleet has been cut in half. Crucially, this shrinking of the fleet has come with the upgrading of the existing vessels.
Demand for passenger and vehicle shipping has dropped 46 percent since 2009, matching the contraction of the fleet. The combined turnover of the four companies is just over 700 million euros per year, but operating and net profits have recovered. Earnings before interest, tax, depreciation and amortization (EBITDA) added up to 152 million euros last year for all four majors, according to the 16th annual study on coastal shipping in Greece by XRTC Business Consultants.
Ferry companies remain unable to benefit from the constant growth in passenger traffic, mainly due to strong competition from air transport, according to XRTC, that notes that despite the restructuring the companies continue to bear high operating costs and are vulnerable to external risks.
Capital controls and the general negative economic climate continue to hamper domestic tourists from using coastal shipping. “The price of a ferry ticket remains high for the average Greek compared to air transport for traveling to the islands,” the report argues, while stressing the need for the redesigning of the country’s coastal shipping product in general.
The Greek industry accounts for 17 percent of the European coastal shipping, while the Greek population is only 2.2 percent of that of Europe. However, transport in Greece has peculiar features that other European countries do not, so they cannot be considered in the same light.