YEAR 2008

End of the road for Newcastle-Norway service

May 27, 2008 - DFDS Seaways is closing its Newcastle-Norway route at the end of the summer season because of soaring oil prices, over capacity in the market place and the current economic slowdown.

As a result, the Queen of Scandinavia, which operates on the route, has been put up for sale.

DFDS took over the loss-making service between Newcastle and Bergen-Haugesund-Stavanger in Norway from Fjordline in 2006 confident that it could turn the business around but have reluctantly had to admit defeat.

John Crummie, UK managing director said today: "The target was to turn around the negative development. In 2007 we changed tonnage on the route, we changed our crewing on board as well as our service and onboard concepts to support delivery of a positive result.

"The result in 2007 fell well short of expectation and the current financial development has fallen below the level required to continue operating the service. Furthermore, dramatically increasing oil prices, downward price pressure from over capacity in the travel market place and the current economic slowdown are burdening the service.

"Consequently, we have taken the difficult decision to close the service from September 1after the summer season."

The decision affects approximately 270 jobs on the ship Queen of Scandinavia. The employees are mainly from the UK and Denmark, and a number of the crew members are on time-limited contracts. It will also affect approximately 70 jobs in the land based services in Denmark, Norway and UK.

John Crummie added: "This situation will naturally be handled in a caring and respectful fashion towards our employees and recognising different national procedures. In the UK we are starting the dialogue with the employee representatives to clarify the situation.
"We will continue with a full service until September 1, and we hope this gives enough time for our valued customers and trade partners to adapt to the new situation.
"We have now created a platform to concentrate resources on improving the financial results and development of our routes to Holland from Newcastle, Denmark from Harwich and within Scandinavia and we look forward to working with the trade to grow sales in the future."