CEO update on fuel supply and surcharges (Monday 27 April)

Hello Everyone,

You don’t need me to tell you that the war in Iran is creating uncertainty and anxiety in society.

We may not be close to the destruction wrought by bombs and missiles, but we are certainly feeling the consequential pain of this geopolitical crisis.  Prices at the petrol pump have soared as the Strait of Hormuz has been strangled. Energy costs are rising. even mobile networks have warned about potential data rationing.

In the travel sector you will have seen concerns raised by the airlines. According to their trade body IATA, the industry has perhaps six weeks of kerosene left. Lufthansa announced 20,000 flight cancellations last week. Virgin Atlantic confirmed a £360 increase in ticket prices.  British Airways have made similar statements.

Their warnings have concerned me and I’m sure they have concerned you. However I want to reassure you: they certainly do not affect Brittany Ferries and destinations served by sea.

In the face of all the uncertainty, I took the decision to take our more positive message to media last week.  In London and Paris I toured TV and radio studios. I wanted as many people as possible to know that there is no chance that Brittany Ferries will run out of fuel. You can be 100% confident that we will get you to your destination.

Furthermore, we will not add any surcharge to holiday makers’ tickets in response to the crisis in the gulf.

Our prices rose by inflation earlier this year, and by inflation alone. There will be no fuel surcharge. We are able to make this price promise to passengers because we took prudent steps to hedge the majority of fuel costs before the crisis began. Hedging means setting a price in advance : in this case around 70 dollars a barrel.

If the price had fallen, we would have lost out. Our fuel costs would have been higher than the price on the open market. But as the price per barrel rose, and rose significantly due to events elsewhere, our hedging strategy proved successful.

Hedge your bets is an expression we all understand. Sometimes you win. Sometimes you lose. But I don’t think anyone has the right to adopt the posture of a bad gambler, least of all a sector taking people on holiday. The apparent willingness to reach for the war in the middle east as an excuse to recover losses in the guise of surcharges, or by cancelling flights that don’t make a profit, makes me angry

But Mr Mathieu, there is no choice but to levy surcharges and cancel flights, they say. Well, if that were true Jet 2 and Easy Jet would not have followed us in statements guaranteeing no surcharges last week.

I want our ships to be full of holiday makers this summer and I hope my message of confidence helps. But I also want to offer a counterpoint to seeds of anxiety and fear that have been sown and propagated by many airlines, in an already charged atmosphere of uncertainty.

Everyone should be confident that their holiday company will do the right thing, not cancel promised services because the numbers are not as good as budget. Nor must they pile on the pain of a gamble gone wrong, by levying fuel surcharges.

Finally, and perhaps most importantly, I want to remind everyone that destinations like Brittany and Cantabria, Cork and Guernsey, are safe, beautiful and unencumbered by over-tourism. They are a million miles from the centre of a conflict we all pray ends soon.

So there will be no nasty surprises this summer with Brittany Ferries. Just a lovely holiday, full of joy and wonder, at the end of a relaxing voyage by sea.  Travelling on the most modern fleet in Europe.

We look forward to welcoming you on board.

Sincerely

Christophe Mathieu

Brittany Ferries CEO