Setting Sail: Leading the Way in Baltic Ferry Travel
Interview with Margus Schults, CFO of Tallink Silja
Tallink Silja GmbH has established itself as a key player in the Baltic Sea ferry industry, providing reliable passenger and freight services. Founded in 1883, the company has evolved from its early operations to focus on overnight cruises and short trips to Tallinn, Estonia. In an interview with Margus Schults, CFO of Tallink Silja, we gain insights into the company's strategic direction and approach to modern maritime challenges.
With around 5,000 employees and a revenue of 830 million EUR, Tallink Silja operates a fleet of 14 vessels catering to leisure and business travelers. The company offers fixed routes, including overnight trips and a two-hour service to Tallinn. Tallink Silja is publicly listed and maintains offices in Helsinki, Hamburg, Stockholm, Tallinn, and Riga. CFO Margus Schults, who has been with the company for 15 years, emphasizes the importance of local authority relationships: "Our presence in these key cities allows us to forge strong partnerships, essential for our operations."
Challenges and Market Position
The COVID-19 pandemic posed significant challenges, halting operations and forcing the company to navigate a turbulent travel industry. With a 20% decrease in operations compared to 2019, Tallink Silja has focused on core markets, generating about 50% of revenue from Finland, with Estonia and Sweden contributing 20% and 10%, respectively. The ferry operator competes not only with other services in the Baltic Sea but also with leisure activity providers, including shopping centers and streaming services like Netflix.
"We aim to provide an unforgettable experience that goes beyond transportation," Margus Schults explains. The company emphasizes digital transformation, with 95% of bookings made online and a loyalty program with around 3,000 active participants. The customer base spans all age groups; families travel during summer, weekends attract party guests, and weekdays often see significant numbers of senior travelers.
Tallink Silja operates established routes classified as Cruise Ferries, allowing for the transport of tourists and cargo, including cars. Notably, 80% of revenue comes from cruise services. Onboard, customers enjoy a variety of entertainment options, including shopping, duty-free purchases, and diverse dining experiences. The company employs around 5,000 people, with approximately 500 per ship, of which about 250 are on duty in a two-week rotation, supplemented by 70 to 80 technicians. The company has lost around 4% of its customer base from Ukraine and Russia due to ongoing conflicts.
Sustainability and Digital Transformation
Sustainability is a core principle for Tallink Silja. Since 2009, the company has cut CO2 emissions by 50% through advanced technologies and modernized vessels. "We have invested significantly in energy-efficient ships since 2000, allowing us to tailor our offerings to customer needs while minimizing environmental impact," Margus Schults notes. A ship built in 1993 has undergone renovations, optimizing the air conditioning system for individual cabin control, leading to further fuel reductions. The company is integrating the Internet of Things (IoT) into its operations, aiming for improved efficiency. Tallink Silja plans to invest in artificial intelligence and digital solutions for enhanced customer personalization and operational efficiencies.
Looking ahead, the company is steadily expanding its fleet with new vessels, including the "My Star," which serves the Helsinki-Tallinn route since December 2022. This investment of approximately 250 million EUR underscores its commitment to enhancing service offerings. Margus Schults emphasizes collaboration, stating, "We are exploring partnerships with hotels and taxi services to create an integrated travel experience for our customers."
Future Vision and Expansion Plans
Tallink Silja aims to enhance customer experiences with innovative onboard concepts to attract customers back in the post-COVID era. The markets of Finland, Sweden, and Estonia remain crucial, but there is growing interest in exploring new international markets for additional customer segments. The company prides itself on its modern fleet, having introduced nine new ships since 2000, tailored to meet customer needs while being sustainable and energy-efficient. Tallink Silja maintains high standards onboard, particularly regarding food and entertainment, ensuring that while they are not the cheapest option, they offer an excellent price-performance ratio.