Act of god or foreseeable issue for Irish Continental Group?

Irish Ferries owner has cancelled bookings for around 12,000 passengers

A computer-generated image of the WB Yeats
A computer-generated image of the WB Yeats

Acts of god, as they’re known, are terribly unfortunate events for big corporates. They have the effect of causing a public relations storm during which the company in question must plead with the public not to blame them because the act was beyond their control.

Last week's unfortunate was Irish Continental Group (ICG), the owner of Irish Ferries, which had to cancel bookings, thus discommoding around 12,000 summer passengers.

The expected delay in delivery of the new WB Yeats ship was responsible for the cancellations. The delay, of course, was caused by an "extraordinary circumstance" which was, Irish Ferries said, "beyond our control".

But should it have been beyond their control?

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Irish Ferries are experts in the business of buying, selling and commissioning new ships. Historically they have had success in introducing new ships to market on time. One would think they are also experts in the timelines around new ship introductions, and the “acts of god” that may occur in the interim.

On this occasion Irish Ferries perhaps jumped the gun. The company was possibly too optimistic or else it didn’t adequately factor in the possibility of delays. Delays will have been, to some extent, anticipated by the company, but on this occasion they appear to have dropped the ball.

With shipbuilding there are a number of moving parts. In the case of the WB Yeats, the hull was constructed in Germany, while the passenger module was being built in Gdansk, Poland. Clearly if there was adverse weather the transfer and joining up of the two modules would be delayed.

Indeed, there has been adverse weather on the continent with two storm events so far this year, one as early as January. But neither of those caused Irish Ferries to rethink the timeline for introducing a new ship to its fleet.

Passengers have lost out as a result, and shareholders won’t be particularly pleased if the share prices rapeseeds, although Monday’s slippage was marginal.

Irish Continental was silent on the issue of recompensing travellers for their ruined summer plans. Presumably the company will have had delay-in-delivery insurance in place to cover the prospect, however remote, of precisely the setbacks that have now emerged.

And in a highly competitive holiday travel market it could do worse than use that money to pour oil on the troubled water – those passengers it has left in the lurch.