HELSINKI - Viking Line's chief executive said that greater competition in post-EU accession Estonia was the main reason why the Finnish shipper ended the financial years with lower profits.
"The price level, especially on the Tallinn route, is lower, and therefore sales per passenger have declined," CEO Nils-Erik Eklund told the Finnish business newspaper Taloussanomat. The increase in freight carriage between Tallinn and Helsinki was not enough to offset the negative effect on profit, Eklund said, adding that earnings were likely to decline further in 2005.
"Competition in the operation to Sweden is getting tighter too, as Tallink's new ship, the Victoria, is in operation throughout the year. Competition remains intense in traffic to Tallinn, as most ships are sailing under a flag other than the Finnish flag and have Estonian crews," he said.
Eklund said the costs of a ship with a Finnish crew were two times higher as for an Estonian crew.
Viking Line's market share in passenger traffic between the Baltics, Finland and Sweden declined to 31.3 percent in the financial year ending October from 31.7 percent the year before. The decline was biggest in traffic between Helsinki and the Baltics, where the company's market share dropped from 17.7 percent to 13.2 percent. The main reason for the latter decline was due to the Cinderella leaving the Baltic route to start a route between Sweden and Finland's Aland islands.
