Coastal shipping industry under pressure to raise fares, official says

An increase in fuel prices has significantly burdened financial results of coastal shipping companies, creating pressures for an increase in coastal shipping fares after a decade of stability and discount policy, Mihalis Sakellis, chairman of the Association of Passenger Ship Operators said.

Sakellis noted that unfortunately an increase in business was accompanied by a 29 pct increase in fuel prices in 2017 and by another 25 pct in 2018, a development that burdened companies’ financial results by 100 million euros, or 15 pct of total fares. Sakellis called for a reduction in VAT rates to 13 pct of even 6.0 pct in order to cover increased operating expenses without raising transport costs. He added that depending on the shipping line, 30-50 pct of passengers travelled with discount tickets. Sakellis said that the coastal shipping business was facing a further increase in costs by 30 pct due to its obligation to consume “cleaner” fuel from 2020 onwards. He said that the addition of new ships in the market helped the sector to record a 9.5 pct increase in transport in 2017, while a 3-5 pct increase was expected for 2018.

A total of 74 ships are currently operating in coastal shipping lines in the Aegean Sea and the Ionian Sea, of which 13.5 pct have an age of more than 40 years. Sakellis said that by the end of the next decade, 41 ships or 55.5 pct of total will be aged more than 40 years leading to the need of gradual replacement of the fleet.