Losses at P&O Ferries widen four years after mass sackings
P&O Ferries remains heavily loss-making, almost four years after the company dismissed nearly 800 crew in an effort to cut costs and avoid bankruptcy.
The company’s latest accounts show it lost £99 million in 2024, up from £91.4 million the year before, as turnover fell by 8.9 per cent.
Freight volumes declined and passenger numbers also slipped. P&O carried 4.3 million passengers in 2024, down slightly on the year before and almost half the 8.4 million who travelled with the company in 2018.
The deficit on the company’s three defined benefit pension schemes remains high at £120 million, although that is an improvement on £152 million the previous year.
In March 2022, P&O Ferries sacked its mainly British crews and replaced them with cheaper agency staff from overseas, paying some as little as £4.87 an hour.
The company’s chief executive at the time, Peter Hebblethwaite, repeatedly argued that P&O would have collapsed without the sackings and cuts to the wage bill. He resigned in September last year.
The accounts show Mr Hebblethwaite was paid £620,000 for his final full year in charge.
Following widespread condemnation of P&O’s actions, the UK and French governments changed the law in 2024 to require ferry operators to pay the minimum wage in their territorial waters.
Those changes are expected to push up P&O’s costs further.
The company continues to rely on financial support from its owner, DP World, the Dubai-based ports and logistics group.
By the end of 2024, P&O Ferries had borrowed £449 million from its parent company, up from £295 million a year earlier. The loan is not currently being repaid and is accruing interest.
“This looks like a business in terminal decline,” said Richard Murphy, emeritus professor of accounting at the University of Sheffield.
“As to funding, the entire activity of the company would be insolvent without the support of its Dubai-based parent company. On any rational economic basis, it is hard to see how any investor could claim this is a viable business as it is currently managed.”
P&O has been loss-making since 2020, when the pandemic severely disrupted travel and trade.
The wider ferry industry is facing rising costs from tougher regulation, higher carbon charges and more onerous post-Brexit border controls. Competition is fierce but rivals including Irish Ferries, Stena and DFDS reported profits in 2024.
P&O’s accounts show DP World has provided a formal letter of support, committing to fund the company’s losses for at least another year.
They also reveal that the business has been registered in Dubai as Dubai Ferries Holding FZE, although it will continue to operate as normal in the UK.
In a statement, P&O Ferries said: “Our 2024 results show that our transformation is delivering. Despite challenges in the freight market and the long-term impact of Brexit on the sector, our financial position has continued to improve, customer satisfaction is rising, and our state-of-the-art hybrid vessels on the Channel are delivering significant reductions in carbon emissions."
The spokesperson added: “:The business is focussed on delivering a reliable and market-leading service to our customers, and is well positioned to continue its recovery to sustainable long-term growth.”
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