P&O Ferries has decided to close its Rosslare-Cherbourg route but is hopeful it can be sold on to another operator.

Iarnród Éireann, which operates Rosslare port, has said the closure of the route would be a significant revenue loss.

A spokeswoman said its initial assessment was that it would have a "small impact" on the number of jobs at the Co Wexford port.

There are 90 people currently employed by Iarnród Éireann at Rosslare, where Stena, Irish Ferries and Euroshipping also operate.

The P&O decision is one of a number of measures identified during an overall review of its operations. It is to reduce the number of ships it operates to 23 from 31, and to reduce the number of routes it operates to nine from 13.

The number of people employed by P&O is likely to drop by 20 per cent, or approximately 1,200.

Management believes that, as a result of these measures, costs can be reduced by £100 million (€147 million) a year and its profits before interest and tax could rise by £55 million a year.

P&O will take a £240 million exceptional charge in the current financial year as a result of the review and write-down of goodwill.

A spokeswoman said the company was hopeful the Rosslare-Cherbourg route would cease by the second quarter of next year, subject to consultations with interested parties. A separate source said the company was in discussions with other parties about the possible sale of the route.

The ship operating the route, the European Diplomat, will be relocated to a North Sea route, along with its crew.

The other three routes facing the axe all operate between French ports and Portsmouth.