Britain's Peninsular and Oriental Steam Navigation Co (P&O) announced plans today to cut capacity on its Dover-Calais ferry route at a cost of 525 jobs in an effort to cope with tough trading conditions.
P&O, which runs a number of routes across the Irish Sea, said in its third-quarter trading statement last week that the ferries unit was suffering stiff competition from low-cost airlines.
No-frills airlines such as Ryanair and easyJet are offering bargain tickets on European destinations, stealing a march on established carriers, ferry operators and train services through Eurotunnel's Channel Tunnel.
"We are not alone in experiencing such a downturn but we are the first to propose decisive action to match our capacity to current demand," P&O Ferries Managing Director Mr Russ Peters said in a statement.
P&O plans to operate six multi-purpose ferries and one freight ship in 2004, compared with the seven multi-purpose ships and one freight ship currently.
The firm said the plans could lead to 525 redundancies among seafaring staff on the Dover-Calais route. It said other plans for shore-based services could lead to 96 shore staff losses.
The group employs around 8,600 in its ferries business.