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DFDS boss dismisses rival bid for SeaFrance

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DFDS boss dismisses rival bid for SeaFrance

Nov 16, 2011 08:10AM GMT

The boss of Danish ferry giant DFDS has claimed that only his company can rescue struggling cross-channel operator SeaFrance.

President and chief executive Niels Smedegaard dismissed a rival offer from a workers’ co-operative for the French ferry firm as a “mirage”. His comments came ahead of a Paris commercial court convening today to rule on the two bids.

SeaFrance has suspended operations for 48 hours on the Dover-Calais route while waiting for the outcome of the court hearing.

The DFDS bid, which has France’s LD Lines as a minority partner, involves creating a new company operating several channel routes: Dover-Calais, Dunkirk-Dover (DFDS) and Le Havre-Portsmouth and Dieppe-Newhaven (LD Lines).

Three of SeaFrance’s fleet of four vessels would be retained, with a freight ferry switched to Dover-Dunkirk instead of Calais. DFDS-LD Lines would retain only 460 workers out of the SeaFrance workforce of more than 800.

Smedegaard, quoted by French regional newspaper La Voix du Nord, said: “The co-op’s bid does not have any financing and also makes provision to retain four vessels and all of the workforce.

“In the current crisis situation, with the competition and over-capacity which exists on the cross-Channel market today, the co-op’s project just isn’t viable.” He added: “Certain people still believe that the French state will intervene financially but the EU has made it clear that this is no longer possible.

“Is France going to go against the EU? The reality is, apart from DFDS, no one is interested in SeaFrance.” His comments came as DFDS today delivered a 47.6% rise in third quarter profits to DKK 332 million and forecast a year end operating profit of DKK 1.5 billion.

Smedegaard described the results as being in line with expectations following a “decisive turnaround” in earnings from transport and logistics activities.

“There is growing uncertainty about future growth in Europe’s economies, but regardless of the prospect of lower growth in some markets, DFDS’ solid capital structure and efficiency projects put us in a strong position to face the future,” he said.

EasyJet posts 60% increase in profits

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EasyJet posts 60% increase in profits

Nov 15, 2011 08:17AM GMT

EasyJet has delivered a 60% rise in full year pre-tax profits to £248 million and is returning £195 million to shareholders.

The budget carrier, under pressure from founder and major shareholder Sir Stelios Haji-Ioannou over dividend payments, said it was making “tangible returns” to shareholders despite a £100 million hike in fuel costs.

Overall capacity rose by 11.5% due to network expansions from Gatwick and in France and Switzerland. Passenger numbers rose 11.8% to 54.5 million and load factor improved by 0.3 percentage points to 87.3%.

Total revenue grew by 16.1% to £3,452 million resulting in growth of 4.1% in revenue per seat to £55.27. Ancillary revenue rose by 12.9% to £11.52 per seat following “decisive management action” in the second quarter of the year.

Passengers originating outside of the UK now account for 56%, an increase of 3 percentage points compared with 2010.  Those flying on business increased by almost one million to 9.5 million

Underlying cost per seat fell by 1.3% for the full year with strong performances in ground handling, maintenance and disruption-related costs, the carrier said.

Chief executive Carolyn McCall said: “Despite the headwinds of higher fuel costs and a weak and uncertain economic outlook, our focus on customers, robust operational performance, the strength of EasyJet’s network combined with cost control and capital discipline means that EasyJet is well placed to succeed.”

The airline took a swipe at government for reversing its election promise to turn Air Passenger Duty in to a per plane tax.

“Instead it is proposing to lower the tax on long-haul flights and increase it on short-haul flights,” EasyJet said. “Evidence shows this is both economically and environmentally damaging.

“Aviation’s entry into the European Union Emissions Trading System means that there is no longer any environmental case for taxes on aviation.”

The airline also voiced concern over “monopoly infrastructure” airport and airspace providers across Europe which continue to impose higher charges despite the uncertain economic climate.

“Monopoly airports need to become more efficient, with infrastructure and associated charges built around the needs of passengers on point-to-point carriers such as easyJet. This will bring wider economic benefits by promoting tourism and trade,” EasyJet said.

Looking forward, the carrier said: “The macro-economic environment remains challenging for all airlines as weak consumer confidence across Europe slows the rate at which higher fuel prices and increased taxation can be passed onto passengers.

“Against this backdrop EasyJet is taking a cautious approach to capacity deployment.  As a result, capacity in the first half of the year is planned to be flat (adjusting for disruption in the first part of the prior year), with growth of around 4% for the full year.

“With around 45% of winter seats now sold, in line with the prior year, first half passenger revenue per seat is expected to grow by mid-single digits with planned improvement in yields, bag charges and other ancillary revenues.

“Cost per seat excluding fuel and currency impact is expected to grow by 2% to 3% for the full year and by 4% in the first half of the year, assuming normal levels of disruption, driven by price increases at regulated airports and investments in new revenue streams.

“At current fuel and exchange rates easyJet’s fuel bill is anticipated to increase by £220 million in full year 2012 compared to full year 2011.

“Despite the headwinds of higher fuel costs and a weak and uncertain economic outlook, our focus on customers, robust operational performance, the strength of EasyJet’s network combined with cost control and capital discipline means that EasyJet is well placed to succeed.”

Spain to ‘refresh’ brand with new marketing plan

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WTM: Spain to ‘refresh’ brand with new marketing plan

Nov 09, 2011 14:00PM GMT

The Spanish Tourist Office is following the lead of Microsoft and Levi’s as it plans a three-year strategic marketing plan, due to launch in January.

The Spanish Tourist Office’s new UK director, Enrique Ruiz de Lera, said Spain faced major challenges and was seeking to learn solutions from the experiences of major consumer brands.

He compared Spain to Microsoft – leading the market for many years but now challenged by Apple – or, in Spain’s case, Turkey and Croatia. Ruiz de Lera said: “These destinations are competing hard. They have excellent product and they’ve learnt from our mistakes. We need to refresh our brand.”

Ruiz de Lera also said Spain was seen as “uncool” by young people, in the same way as under-30s don’t want to buy Levi jeans because they are worn by their parents.

As part of a drive to target the younger market, the Spanish Tourist Office, is working with MTV on branded content – a first for Spain and MTV. Reality TV show Fix You will air in January.

Objectives of the marketing strategy include a drive to increase the average tourist spend by 15% in three years – a goal that Ruiz de Lera admited was ambitious.

“It’s a long shot. When we planned the goal, the economy was less difficult. But you have to be bold,” he said.

The STO also hopes to diversify the market over the next three years, both seasonally and geographically.

Ruiz de Lera also said product diversification was necessary, with a cross-selling plan to encourage tourists to experience more. “A visitor to the Costa del
Sol can add on a few days in Malaga, for example.”

The UK market was still extremely price-sensitive, he said, and Spain had to be careful not to price itself out of the market.