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Irish Continental Group plc announces restructuring of its Ireland-France ferry service

Irish Continental Group plc announces that its Ferries Division is restructuring its service between Ireland and France in order to reduce costs and maintain competitiveness. The action is being taken against a background in which the volume of cars carried on the Ireland / France route has fallen 7% in the year to date compared with 2003.

The initiative, which is a consequence of demand in the market place for lower fares, together with additional competition from sea and air carriers, in some cases State-assisted, will see crewing of our Ireland / France service transferred to a third party staffing agency who will employ fully qualified EU crew. It follows a restructuring of crew rosters, principally on the Irish Sea, during 2004, which has enhanced competitiveness on the Ireland / UK routes. The change will involve a reduction in directly employed seagoing staff of approximately 150 people, of whom approximately 125 are permanent and 25 are long-service temporary staff. A number of seasonally-employed personnel will also be affected. Irish Ferries employs a total of 1,200 people.

A voluntary severance package, to meet the requisite number of seagoing staffing reductions, will be offered throughout the fleet. Personnel from the Ireland/France service who decide not to avail of the voluntary severance package will be offered a transfer to the Irish Sea ships.

It is envisaged that the proposed redundancies/transfers will be completed before the end of November when the operation of the Continental service will cease for the winter months. Services will recommence in March 2005.

This development complements other initiatives being implemented including the streamlining of the sales distribution process (which involves the relocation of our call centre / retail outlet from Dublin’s city centre), a further concentration on maximising bookings via the internet and other cost reducing initiatives throughout the group including Dublin terminal operations.

The various initiatives will give rise to an exceptional charge to be taken in the results of the group for the year to 31 December 2004. The amount will depend, inter alia, on the profile of those opting for voluntary severance but it is likely to be in the region of €7 million.

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20th October 2004

Enquiries: Don Hall, The Hall Company Tel: 01-6609377