What Next For FSG? Yard Loses Their Biggest Order While Further Delays to Brittany Ferries Ship Have been Confirmed

One of a series of renders of HONFLEUR at sea released by Brittany Ferries on the day her hull was launched, 14th December 2018. Brittany Ferries.
One of a series of renders of HONFLEUR at sea released by Brittany Ferries on the day her hull was launched, 14th December 2018. Brittany Ferries.

Update 09.03.2020: Since this article was published, Irish Ferries parent company Irish Continental Group have published their results for 2019. On page nine of the results presentation it is stated that the company have paid a down payment of 20% (€33 million) to FSG for the second ship, yard number 777. As money has already changed hands this could make it more difficult for Irish Ferries to walk away from the contract, should they wish, without losing any money as a result. The remainder of the purchase price is due to be paid on delivery.

The 31st May, 2016, was a huge day for all involved at Flensburger Schiffbau-Gesellschaft.  The German yard, situated in the north of the country close to the border with Denmark, had just announced a €146m order from Irish Ferries parent Irish Continental Group (ICG).  This would be the first time the shipyard had built a large passenger and vehicle “Ro-Pax” ferry since its formation in 1872. It signalled that what until then had mainly been a yard that built cargo ships was moving into the top-tier of ferry builders.  The yard had previous Ro-Pax experience, notably Caledonian MacBrayne’s LOCH SEAFORTH and five vessels for BC Ferries, but the Irish Ferries ship was much larger than any passenger carrying ship they had built before.

Other orders would soon follow.  In June 2017 Brittany Ferries confirmed that they had ordered a 42,000 gt LNG fuelled ferry for delivery in April 2019.   Less than six months later, just before Christmas, Tasmania’s TT Line Company signed a letter of intent for two large fast Ro-Pax ferries for delivery in 2021.  This order was confirmed in May 2018, but not before Irish Ferries parent Irish Continental Group confirmed an order for a huge 67,000+ Ro-Pax for its Dublin – Holyhead route in January 2018.  

With orders for Ro-Ro vessels also confirmed, just a couple of years ago FSG had a full order book up until the end of 2021 with a value of over €1bn.  The German shipyard looked like it could dominate European ferry building in the same way Aker Finnyards and Van der Giessen de Noord had in previous decades.

Render of Brittany Ferries HONFLEUR wearing the new livery for the 2019 season. Brittany Ferries.
Render of Brittany Ferries HONFLEUR wearing the new livery for the 2019 season. Brittany Ferries.

A Different Picture

Fast forward less than four years from the first ICG order, and there is a very different picture at FSG.  The Irish Ferries ship, W.B. YEATS, was delivered late and incurred delivery penalties.  The yard lost €111m in 2018, leading to a reorganisation and the eventual sale of the concern to an outside investor, Sapinda (now renamed Tennor Holding BV).  The delivery of the Brittany Ferries ship, HONFLEUR, has been pushed back a number of times.  Brittany Ferries recently confirmed that the last date received from the yard, spring 2020, would not be met.  Already over a year late, HONFLEUR is still being fitted out and delivery is not expected until around Autumn.  

A rendering of how the new TT-Line
A rendering of how the new TT-Line “Spirit of Tasmania” FSG-built new builds could have looked. The order was subsequently cancelled by mutual consent. FSG.

Cancelled Order

Last week, TT Line Company Pty and FSG announced the cancellation of the Tasmanian ships by mutual consent.  TT Line would instead turn to Rauma Marine Constructions (RMC) which had lost out in the original bidding process to FSG.  RMC is a new name for a yard very experienced in building and designing ferries, the former Aker Finnyards and STX Finland (Rauma). According to FSG, the cancellation of the Tasmanian order is part of the “realignment” of the business. Shippax reports that Finnish naval consultancy Foreship, which worked with FSG on the previous design, will be retained by TT-Line to work on the new design with RMC. Foreship is also working with RMC on AURORA BOTNIA which is currently under construction at the yard.

A side profile drawing of the new Spirit of Tasmania ships to be built for TT Line Pty at RMC. Rauma Marine Constructions.
An early side profile drawing of the new Spirit of Tasmania ships to be built for TT Line Pty at RMC. Rauma Marine Constructions.

Meanwhile there’s still no word on Whether work has yet started on Irish Ferries’ new Dublin – Holyhead ferry

The second Irish Ferries vessel still appears to be on the order book, but neither the yard or shipowner have made any new comment on the project in some time. Originally the ship was to have been delivered in the middle of this year, though this appears to have been subsequently pushed back until towards the end of this year.  When public access was cut off from the shipyard’s slipway webcam last month, no construction appeared to be taking place.  Nor has there been any announcement about steel cutting taking place, though this should have started sometime last year.  For example, in the original HONFLEUR timeline there was 10 months between steel cutting starting and the launching of the hull in November 2018. Sea trials were to follow in March 2019.  

Rendering of Irish Ferries currently unnamed second FSG new-build ferry. When ordered she was expected to enter service on the Dublin - Holyhead route in mid-2020. Irish Ferries
Rendering of Irish Ferries currently unnamed second FSG new-build ferry. When ordered she was expected to enter service on the Dublin – Holyhead route in mid-2020. Irish Ferries

No New Irish Ferries Ship in 2020?

Whether the Irish Ferries order will be fulfilled or not is still unknown, but with HONFLEUR under construction since February 2018 it would appear highly unlikely that Irish Ferries will receive their new ship this year.  From steel cutting to the launch of W.B. YEATS‘ hull alone took nine months.  The construction of the ship, which is smaller than the ship on order, took around 20 months from steel cutting to delivery.  HONFLEUR has been under construction for over two years with no sign of delivery with interior spaces reported not to be finished yet.  The Ro-Ro, LIEKUT, the last of eight for FSG’s former owner Siem also lies unfinished at the outfitting pier, though it appears machinery tests have been started. 

Artist rendering of the new €165.2 cruise ferry ordered by Irish Continental Group for their Irish Ferries Dublin to Holyhead service. ICG
Artist rendering of the new €165.2 cruise ferry ordered by Irish Continental Group from FSG for their Irish Ferries Dublin to Holyhead service. ICG

Irish Continental Group has previously been rumoured to have investigated the possibility of building a new ship in China, but nothing appears to have come of this. Competitor Stena Line of course received delivery if their own new Dublin – Holyhead ferry, STENA ESTRID, last year. She entered service in January. The Irish Ferries ship she sails opposite for much of the year, EPSILON, is inferior in terms of both passenger and cargo capacity and has far fewer passenger facilities. Irish Ferries do have the DUBLIN SWIFT fast-craft as well, but she does not sail in adverse weather and has had a patchy reliability record so far.

What next?

Much would appear to hinge on a second report which has been commissioned into FSG’s viability, though the company has not confirmed this. The yard need loan guarantees from the state of Schleswig-Holstein in order to raise the finance to build further ships. With the future of the yard uncertain and the yard having not made a profit in years the state has been unable to provide these guarantees. It appears that previous owner Siem may have underwritten or even provided loans themselves to finance at least five previous vessels as recently as 2016. At the same time 98 employees were made redundant and the remainder agreed to a 5.8% pay cut. This is in addition to other financial assistance they have provided the yard with after they rescued the loss-making concern for just €1 back in 2014.

LIEKUT is launched from the slipway at FSG on 29.10.19. Flensburger Schiffbau-Gesellschaft.
LIEKUT is launched from the slipway at FSG on 29.10.19. Flensburger Schiffbau-Gesellschaft.

The works council at the yard, meanwhile, estimated last month that around 300 of FSG’s permanent employees are currently at home and reliant on state financial assistance. Their skills are not required with FSG’s focus now on delivering HONFLEUR (and LIEKUT) as soon as possible. With only the Irish Ferries order known to be on the books after the delivery of HONFLEUR and LIEKUT, what does the future hold for FSG?