UDS may sell its passenger fleet

“Ukrainian Danube Shipping” is considering the possibility of selling the passenger fleet.

Currently, the UDS fleet includes four passenger ships – “Dnipro”, “Volga”, “Ukraine”, “Moldavia” and pleasure ship “Yugenii Kosyakov”, which are idle.

“Moldavia” and “Ukraine” are in Linz, awaiting a decision regarding the delivery to the ÖSWAG plant for repair. Maintenance of vessels during the parking period is about 10 thousand euros per month per vessel. The old “Dnipro” and “Volga”, which have no demand from charterers at all, are located in Izmail and are used as housing for our visiting workers, because renting housing in the city, given the influx of immigrants, is far from affordable,” said the deputy general fleet operation director Ruslan Skryabin.

According to Scriabin, since 2014, passenger transportation has been steadily causing damage to shipping. Even the record volume of transportation in 2018-2019 led to the same record increase in expenses (fuel, salaries, maintenance, etc.), as a result, the amount of losses remained approximately at the same level — approximately UAH 30 million per season. According to the results of 2022, the passenger segment generated a loss of UAH 25 million.

It is noted that, in general, more than €8 million was spent on subsidies to “passengers” over the past years. With these funds, the company could, for example, build 25 SLG barges.

“Obviously, the ratio of costs and income that the pass fleet can bring is not equivalent. Therefore, today we are actively considering various options for the future fate of the passenger fleet. As one of the options, offer Germany, Austria, Hungary, and Slovakia to use ships for housing as part of the Ukrainian refugee support program,” says Skryabin.

The UDS notes that this situation is not unique. Other shipping companies are also faced with the difficult choice of working with an aging fleet that is becoming unprofitable for many reasons. In such cases, passenger ships are turned into floating hotels, casinos, and restaurants.

According to the deputy general director of UDS, it is impossible to pay back the investment of €800,000 at current freight rates. In the best case, if at least three ships are operating, the fleet will be able to break even. But after some time, it will be necessary to invest considerable funds again in repairs and upgrades. No business, no enterprise can afford this.

One of the possible options is to try to hold an open competition among charterers for 2024. If the results turn out to be unsatisfactory, ask questions about the possible sale of vessels.