Hans J Marter

11 November, 2006

THREE JOBS in Shetland have been lost after the Faroese shipping company Smyril Line closed its Lerwick office without warning yesterday (Friday).

Directors from the company's headquarters in Torshavn arrived at the Holmsgarth ferry terminal and told staff to go home.

Though the visit was unannounced, the move comes as no great surprise. Smyril has been looking at reducing its Shetland service as part of a bid to turn around losses, reported to be as much as £5 million last year.

Local investment agency Shetland Development Trust, which has a £4.45 million stake in the company, was unable to stave off the closure which is another blow to Shetland's hopes of forging a closer relationship with it Scandinavian neighbours.

Due to falling passenger numbers using the Lerwick terminal, Smyril has decided to radically reduce the number of times its super ferry Norröna will call at Lerwick, in summer 2007.

Senior management met staff at the Holmsgarth office yesterday morning. In a statement, managing director Thomas Magnussen said: "The management of Smyril Line has decided to close the company's office in Shetland.

"Passenger numbers with Norröna to and from Shetland have been decreasing in 2006 and therefore there is no need to uphold an office to take care of the Shetland market."

Mr Magnussen added that a recent complaint to the European Union about a proposed Shetland Development Trust investment of £700,000 into the shipping company had contributed to their decision. The cash can not be handed over until the complaint has been investigated.

"Parts of that investment were meant to finance the Smyril Line office in Shetland," he said.

Staff have been told "their jobs are at risk of redundancy" and consultation with management on this has already begun.

The managing director explained that Smyril was going through "a major turn around", minimising expense and increasing turnover to make the company profitable. This has included rescheduling the Norröna to visit Lerwick just once a week next summer, while adding Scrabster to its ports of call.

Mr Magnussen said: "The turn around has been successful. The management of Smyril Line expects that already in 2006 the company will stop making losses."

Development trust chairman Josie Simpson said they had been told next year's sailing schedule would not be affected by the office closure, after fears were raised that Smyril would abandon Shetland altogether.

"It was disappointing that the company was unable to keep this office open within the commercial plans for the future, but Smyril Line assures us that the service customers receive will not be affected by this operational decision," Mr Simpson said.

Smyril's former Lerwick office manager Gillian Fry said the news that she and her two colleagues had lost their jobs did not come as a surprise.

"In the light of the changes timetabled for 2007 and the fact that the last time Norröna called in here was in October and is not due in again until May next year, the writing was basically on the wall.

"We were aware that something like this was going to happen, it was just a case of when."