Storm batters ferry market

Storm batters ferry market

The coronavirus storm has generated a wave of changes in the coastal shipping industry, with the halving of passenger traffic as well as the possible shift of share packages or the entry of new players into the market, according to XRTC Business Consultants, which has covered the sector’s companies for two decades.

The consultancy believes that passenger traffic this year will not exceed 49% of last year’s. It will therefore come to about 8.88 million passengers, against 18.2 million in 2019.

The results of the first five months of 2020 have been very disappointing, as traffic dropped 60% year-on-year. The ferry fleet has resumed its activity this summer although many ships remain docked. The utilization of high-speed vessels is problematic this year due to the further shrinking of the period of use for such types of ships.

“The 2020-21 winter will be exceptionally difficult for the sector, as the revenues from the first half of 2020 and from the summer will not suffice to cover the operating costs. Therefore the only way for the ferry companies to meet their obligations on a financial as well as an operating level would be a direct state or European grant to ensure their unhindered operation,” says XRTC head and veteran banker George Xiradakis.

The Greek coastal shipping market is also seen being forced to act immediately on two levels: The first is related to its short-term sustainability and the second concerns its long-term maintenance in the context of growth with the use of European resources.

The state assistance is considered to be essential on both levels: “The former will necessitate interventions to keep the industry alive and avoid upsetting the social and geographical cohesion of the country, while the second will require moves to contribute toward the restructuring of the sector ahead of the next 20 years,” Xiradakis explains to Kathimerini.

The so-called large ferry companies – i.e. Attica Group, Minoan Lines and ANEK – may appear dominant but only account for half of the country’s ferry activity, XRTC says, as new players such as Seajets have grabbed significant market shares.

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