Troubled ferry operator cancels sailings
The Local · 19 Oct 2005, 18:08
Published: 19 Oct 2005 18:08 GMT+02:00
The port authority is a major shareholder in Riga Sea Line, and is a guarantor of the company’s large debts. The debts have now grown to such an extent that the authority has now decided to stop traffic. All indications are that sailings will not resume.
Tough competition and high fuel prices are being blamed for the company’s apparent collapse.
Rival ferry company Tallink, which already runs two ships between Stockholm and Tallinn, Estonia, says it is prepared to take over Riga Sea Line’s routes.
“We are very interested and are now discussing the matter,” Tallink Sweden’s CEO Väino Conga told TT.
Tallink recorded a profit of €30 million (280 million kronor) in 2004/05, up by ten percent on the preceding year. It increased passenger numbers by 20 percent on its Stockholm route and by 15 percent on its Helsinki- Tallinn route. But the company has expanded rapidly in recent years and has borrwed heavily.
Other ferry companies are having a tough time. Viking Line and Birka Line’s results are significantly worse so far this year, and Silja Line has made 400 staff redundant.
This has led many analysts to predict mergers and takeovers of struggling Baltic Sea ferry companies. According to newspaper Ålandstidningen there have been discussions between Tallink’s owners and Silja line about the possibility of Tallink talking over its rival.