It is no mean feat. Travel restrictions seem to rise and fall like a stormy winter tide as the virus peaks and troughs. It has required reductions and changes in the sailing schedule as demand has also dropped away, and that process of adaption looks likely to continue.
Paul is fulsome in praise of colleagues and Condor’s owners, who formally acquired the business just before the pandemic struck. Customer support has also been hugely important. But these past months have come with human and financial cost.
With sadness in his voice, the CEO talks about the loss of many, many colleagues. As part of measures to secure the business as revenue crashed staff have gone across the Channel Islands, France and the UK. Describing the situation as ‘a horrible perfect storm of operational realities and financial impact’, he continues: ‘Overall, we dropped by 37% of our total workforce – 205 people. We had no choice other than to do that.
‘The monthly pay bill of £2m. was almost impossible to sustain when you are 100% less of your passenger revenue and 40% less on your freight. So we had to take those actions.’
Condor had £30,000 of support from Guernsey’s and Jersey’s governments for resident workers furloughed in each island. It also established a self-funded furlough scheme for its 160 high-speed crew members who were employed by its Guernsey company but were resident in St Malo in France or the UK – as they were not eligible for government support schemes in the jurisdictions that Condor operates in.
‘The worst we saw was a 40% reduction in our freight volumes and revenues as everything was locked down,’ adds Paul. ‘Our finances have been crippled. We lost 100% of passenger revenue at the very busiest time of year. March, April, May, June is when 80% of our total annual revenue comes from those months. The total lost revenue in the worst week was -75%.’
While some passengers had rebooked for next year or taken a voucher, which helped Condor, others had also needed a refund – resulting in a significant outflow of cash.
The challenge for Condor is that it has gone through the ‘most severe financial trauma’ – but still has to maintain virtually all the operating costs to provide vital services to the islands. ‘It’s significant tens of millions of pounds of impact both in terms of lost revenue but also cash because when the till is not ringing then the costs you have, you have to pay from cash reserves,’ explains Paul.
‘We had to use our cash reserves and increase our working capital with further investment from our shareholders and financing – all to give ourselves enough working capital to work through this period.’
The company also remains in talks with the governments of Jersey and Guernsey about some business support to mitigate the impact of operating critical services, confirms the Condor boss.
Tough as it has been, Paul stresses that the company is ‘absolutely’ viable as a result of dramatic decisions taken since March – plus additional investment from its shareholders and financing. Alongside redundancies, other measures include rescinding of pay increases, directors pay reductions and bonus schemes scrapped.
With an eye on the future and any eventual fleet replacement programme, he says: ‘We are focused on sustaining through this and making sure that we remain viable and ready to recover, and get to recovery as fast as we can.
‘But we are not thinking more than this calendar year ahead because of course you have a fixed plan, impacting on lifeline service. The most important thing is what are we doing today? This week, next week, next month? Until we know when Guernsey opens for passenger travel, we haven’t got the ability to look further.’