250 jobs to go as Birka sells Princess

Tough competition, declining tax free sales and rising fuel prices are combining to put increasing pressure on the ferry companies plying the Baltic Sea routes.

Now, Birka Line has announced that it has sold its Birka Princess ferry with the loss of 250 jobs.

The Cypriot firm Louis Public Company is to buy the boat for around 270 million kronor.

The Birka Princess has recently been out of service for maintenance work and, after 20 years, will cross the Baltic no more. Instead, it will head for Cypriot waters.

Following the sale, Birka Line now has only the Birka Paradise left on the Baltic routes.

“I believe it suits our strategy much better to invest in quality rather than quantity,” said Wiveka Burgaz, managing director of Birka Cruises in Stockholm.

But the sale means that 250 of the company’s 900 employees will be made redundant. They are employed by the shipping company in Åland.

Anders Ingves, managing director of Birka Line, described the sale as a strategic decision and pointed to the tough competition in the area.

Birka Line was in the red when 2005’s third quarter figures were presented at the end of October. The company was showing a loss before tax of 73 million kronor, compared to a profit of 70 million kronor a year earlier.

The firm’s costs rose so much that a 48% rise in turnover had little effect on the results. Passenger numbers rose by as much as 83% during the first nine months. The full year’s figures are expected in a couple of weeks.

“But nothing changed dramatically in the last quarter,” said Wiveka Burgaz.

Passengers who have bought tickets for the Birka Princess will instead be offered trips on the Birka Paradise or their money back.

TT/The Local