Despite cancelling thousands of bookings, Irish Ferries won't take a hit to its bottom line
Analysts says the company will still reap the benefits of a delayed addition to its fleet.
IRISH FERRIES’ PARENT company is not expected to take a hit to its bottom line despite being forced to cancel thousands of bookings during the peak summer season.
The ferry operator notified customers on Friday evening that it was axing a number of sailings from Dublin to Cherbourg in France for between 12 and 29 July, affecting thousands of passengers from Ireland.
The company said the construction of its new ship, the WB Yeats, which was due to be delivered mid-year, had been delayed and it was cancelling the bookings to “minimise the level of potential disruption to customers”.
Passengers whose holiday plans have been thrown into disarray by the announcement have been expressing their frustration over the past few days. Up to 10,000 passengers on 2,300 bookings are thought to be affected.
Nevertheless, despite the negative publicity, analysts expect the cancellations to have little effect on the company’s profitability.
In an update today, Goodbody Stockbrokers said that Irish Continental Group (ICG), which operates Irish Ferries, will still benefit from the investment in the new ship.
“While clearly an inconvenience for those passengers concerned, and potential lost contribution for ICG over the three-week period, it should be viewed in the context of the present value of cash flows derived from an investment having an expected life of 40 years,” Goodbody said.
The stockbroker is maintaining its projection that the firm will generate earnings of €83 million in 2018.
Last year, ICG recorded revenues of €335 million and earnings of €81 million, with around 1.6 million passengers using its ferry services.
In its annual report, the company said that it was expecting the new €144 million WB Yeats ferry to help boost profits in 2018. It is not yet confirmed when the ship will be brought into service.
Cancellations
Irish Ferries said that it has now contacted all the customers whose bookings would be affected by the cancellations.
They have been offered a full refund or transfer to another booking as well as a €150 voucher to use for bookings between Ireland and France next year.
“Given these extraordinary circumstances, which are outside of the company’s control, Irish Ferries is committed to assisting passengers in making alternative travel arrangements to France as best it can,” the company said in a statement today.
It has been reported that anywhere between 5,000 and 10,000 passengers will be impacted in total.
