Redundancies at ferry operator Irish Continental may be on the cards, after the company ordered a review of its Ireland-UK routes.

The company is struggling to maintain profits amid increased competition from other ferry firms and low-cost airlines.

Britons, who account for about three-quarters of the group's tourist passengers, are also being put off holidaying in the Republic because of rising costs, said Eamon Rothwell, the group's managing director.

"Trading in the first quarter of 2005 has been challenging," said chairman John McGuckian.

In the passenger market, car volumes are down 4 per cent on this time last year, while freight volumes are 4 per cent ahead of 2004.

The review will take about two months and may recommend cutting some jobs to lower the company's costs and help it remain competitive, said Mr Rothwell.

"The traditional British passenger that used to come to Ireland for their holiday now has many other options," he said. "So it's time for us to get our cost base in line with our capacity."

About 200 people working on the company's Ireland-UK routes have already asked to be considered for redundancy should a severance package be offered, according to Mr Rothwell.

Irish Continental last year cut about 150 jobs on its French routes between the Irish port of Rosslare and Cherbourg and Roscoff in France after car traffic fell. About 90 per cent of the staff formerly employed on the French routes took a voluntary redundancy package and the rest were redeployed to the group's Irish operations.

NCB analyst John Sheehan said the review is a "potentially positive step" given the competitive market environment.

Profits at Irish Continental, which almost halved last year after the firm took a one-off charge of €11.9 million relating to restructuring and job cuts, will this year be hit by higher fuel costs.

A surge in the price of oil over the past six months will add about €6 million to the company's costs, according to Mr McGuckian.

A new fast ferry service between Dublin and Liverpool started yesterday, pledging to carry 200,000 people this year.

Irish Sea Express.com has invested more than £1 million (€1.48 million) in the newly refurbished catamaran, which can carry up to 500 passengers and 80 vehicles. It will operate two services a day.

The company says the service has created 145 jobs.

The Dublin Port Company welcomed the launch saying that tourists who arrive by ferry travel further into Ireland and spend more per head than their airline counterparts.