Sailing on
There can be no real doubt about the most important single development in the ferry market during 2006 – it has to be Tallink’s acquisition of Silja Line, announced last June. David Davies finds out the latest from the newly strengthened Estonian operator.
Rumours about the ownership of Silja Line had been circulating for some months prior to the summer of 2006. Finally, the speculation was brought to an end in June when it was announced that Tallink Group would be the company to chart Silja’s future course.
The combined operation now has an enviable position in the ferry markets of Northern and Eastern Europe. Its dominance on routes between Estonia, Finland, Germany, Latvia and Sweden is pretty much beyond question, and is only likely to increase as a fully-integrated company strategy continues to emerge in 2007.
There is recognition, however, that the two operations have historically served contrasting passenger profiles, so the approach taken cannot become overly unified. “The profile of the two companies is slightly different… Tallink continues to be more about value for money, while Silja will be aimed more at high-profile passengers,” says Tallink’s purchasing director, Magnus Skjörshammer.
With such fundamental structural changes taking place, there has inevitably been a need for stability in terms of the retail offer. But with onboard shopping accounting for approximately 50% of Tallink’s turnover, it has certainly not been neglected, with several recent developments reflecting a desire to adapt and rework some of the techniques seen widely in airport stores.
Perhaps the most prominent example is the installation of a make-up bar in the perfumes & cosmetics store onboard Galaxy, the latest addition to the Tallink fleet. “Generally speaking, I would say that we are looking – especially on the Tallink ferries – towards using some of the concepts found in airport retail,” confirms Skjörshammer. “It is very important to distance ourselves from the domestic market, and this is one way of doing it. At least in the Nordic region, the shopping environment on ferries has tended to be quite low-key because there has always been a huge difference between domestic and travel retail pricing. But as this gap is becoming smaller and smaller, we see the need to do something different on the ferries and to change the concepts. This is how we are planning to work in the future.”
Tallink is also altering another important aspect of its modus operandi – after well over a decade, it recently took the decision to leave the purchasing pool operated by Inflight Service that provides its vessels with travel retail goods. While some observers may feel the move was inevitable for a company that has become so much more powerful in recent years, Skjörshammer believes that being part of the pool was vital as Tallink matured throughout the late ‘90s and beyond.
“It was very important to be part of the purchasing group – we were a very small company when I started, with two ferries, a small turnover and not that many passengers,” he recalls. “When you are a small company, it is not so easy to negotiate with some of the larger businesses. But since joining with Silja we have 6.5m passengers and a much larger turnover, and so we have decided to try to do it ourselves.”
The change will come into effect from the beginning of the next season, later in 2007. It is an exciting time – and a hectic one, as Skjörshammer would be the first to tell you. And with a new ‘fast ferry’ due to launch in the spring and the planned upgrading of retail stores onboard the Silja Line vessels also in prospect, expect to see Tallink making the news on a frequent basis during 2007. n
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