Norway's Hurtigruten and Fjord Line Make Further Cuts due to COVID-19
Norway’s coastal voyages and ferries are falling victim to the pandemic. While considered a vital means of transportation for both goods and passengers, service is being further curtailed creating concern in the country. Two of the country’s major shipping companies, Hurtigruten and Fjord Line announced further cutbacks in efforts to stabilize weakened financial positions.
Hurtigruten operates its coastal voyages between Bergen and Kirkenes, Norway providing vital transportation for many of the rural and isolated communities along the coastline. This service, which was resumed in June after a suspension due to pandemic related travel restrictions, is in addition to the expedition cruises, which became the focus of attention this summer after the outbreak on COVID-19 on one of the cruise ships.
Norway’s Ministry of Transport and Communications, which contracts for the service, asked Hurtigruten on October 12 going forward to limit its sailings focusing on the northern ports between Bodo and Kirkenes only. While saying they recognized the importance to the local communities of the service, the ministry noted that it was a challenging situation that necessitates changes to the route. “We have chosen to prioritize the areas with limited alternatives for the transport of goods and long-distance passengers,” said Minister of Transport Knut Arild Hareide.
The ministry took these steps to protect the northern communities a month after Hurtigruten had curtailed service along most of the coastline. Hurtigruten had restored service along the coast during the summer offering both its transportation service as well as limited cruising opportunities for passengers. This service continued after Norway restricted passenger travel in the wake of the coronavirus incident on Hurtigruten’s cruise. In August, Norway had said the coastal voyages would continue with a limit of 50 percent of capacity and not more than a total of 200 people including passengers and crew on board as well as other coronavirus precautions.
“With the escalating uncertainties, very low number of national and international travelers, and the impact the pandemic has on our operations, we are sorry to inform you that we must reduce capacity on our coastal service,” Hurtigruten announced in September. They reduced the sailings to only two ships meaning that some of the 34 communities the ships stop at were only going to receive a ship once every five to seven days instead of the historical daily service. Layoffs were also planned to coincide with the reduction in service.
Hurtigruten’s strategy has been to transition more of its operations to exploration cruises as it is scheduled to share the coastal routes in the future with a second operator also contracted by the Norwegian government. The company canceled its expedition cruises into 2021 and, while saying it is unrelated to the pandemic, in a stock exchange filing said it is considering selling its operations in Svalbard in northern Norway. The company owns and operates three hotels, as well as apartments and shops in the region. The filing said it was considering selling the real estate while taking a long-term lease to continue to operate the properties.
On a separate but similar development, Fjord Line, which operates ferries carry passengers and cargo between Norway, Sweden, and Denmark, announced further cutbacks as it works to respond to current market conditions. Since August the company had already laid off approximately 300 people and today they announced additional staff reductions that will impact approximately 140 more employees. As part of the steps, the company also announced that Rickard Ternblom has agreed with the board to resign as CEO of Fjord Line. He had led the company since 2015.
Fjord Line cited the dramatic decline in passenger travel due to the travel restrictions. They said the situation has worsened in recent weeks necessitating the additional steps to reduce costs and retrench the operations to ensure that the company could emerge from the current crisis.