Irish Ferries faces a bill of up to €7 million for cancelling scheduled French services following delays by a German shipbuilder in finishing a new craft for the company.
The ferry operator was forced to cancel sailings of its new ship, the WB Yeats, from Dublin to France, beginning on July 30th, because its builder, Flensburger Schiffbau-Gesellschaft (FSG), had told the Irish firm that the craft would not be ready on time.
Industry analysts at stockbrokers Goodbody and Investec calculated that the cancellations, along with the resulting compensation and rebooking of passengers on alternative services, could cost €4.5 million.
Eamon Rothwell, chief executive of the ferry company's parent, Irish Continental Group, recently estimated that earlier cancellations, also resulting from FSG's failure to finish the WB Yeats on schedule, would cost €2.5 million.
As a result, the delay in finishing the WB Yeats leaves the shipping group facing extra costs of €7 million at its busiest time of year.
‘Good notice’
Mr Rothwell maintained that the company had done everything that could be expected to ease the impact on customers. “We have taken this step because we cannot have any more uncertainty for our customers,” he said.
You could say we are being fair and reasonable and taking a big hit in terms of the numbers in the process
"We have built in a level of prudence here. We deliberately held back space on the Oscar Wilde that we could have sold just in case this happened, and we are able to accommodate over 90 per cent of them.
“Customers are getting good notice because I would prefer to call it now instead of waiting. You could say we are being fair and reasonable and taking a big hit in terms of the numbers in the process.”
Shipbuilding delays
Mr Rothwell did not comment when asked if FSG was obliged to compensate Irish Continental Group. However, disputes such as this normally end up in arbitration.
He noted that he had never encountered this problem before and said delays in shipbuilding were rare. “European shipbuilders do not have a reputation for not delivering ships on time,” he explained.
Mr Rothwell pledged that there would be no further cancellations resulting from delays with the WB Yeats, even if it were not ready to sail the Dublin/Holyhead route as it is scheduled to do in the autumn.
Mr Rothwell explained that passengers on that route simply book a space, rather than a cabin, and would be accommodated on whichever vessel was available. “There won’t be any cancellations on the Dublin-Holyhead service resulting from this,” he said.
