European ferry giant Tallink Grupp is in the process of opening an office in Singapore to spearhead the development and expansion of its activities in Asia.
The Estonian company, which is one of the largest ferry operators in the Baltic with a fleet of 14 cruise ferries and ropax vessels operated by its Tallink and Silja Line brands, will base director of development operations Taavi Tiivel in the Asian city-state.
Tiivel has been tasked with expanding Tallink’s activities in the region.
Tallink has put a strong emphasis on attracting Asian passengers on ships operating in the Baltic in recent years.
Last week, company chief executive Paavo Nogene told delegates at a ferry conference that Tallink carries more than one million Asian passengers per year — or just over 10% of its total passenger load.
Nogene has repeatedly stated that Tallink wants to expand into new markets. For now, it remains unclear whether the Singapore office will be used purely for sales and marketing or as a stepping stone to launch a new Asian-based ferry operation.
European ferry industry sources said Tiivel’s presence in Singapore would suggest it is planning something quite substantial for Asia.
“He is very senior in the organisation. He won’t be going there just to sell tickets,” said a source familiar with the company.
For now, Tallink is keeping its Asian plans under wraps, saying only that more details will be revealed as things progress.
The company could be attracted to Singapore on the shipowning front given the country's very friendly maritime tax regime. So far, a shipowning move to Singapore has not been popular with cruise and ferry companies, which prefer to use Cyprus when flagging out.
Establishing an Asian ferry venture could prove to be an interesting challenge. At present, international ferry services in Asia are concentrated on Japan, South Korea and China. The focus there is predominantly on freight as passengers have largely been lured away by low-cost airlines.
The passenger accommodation on most Asian ferries is functional, with limited facilities. Tallink’s ferries, with their cruiseship-style accommodation and entertainment facilities, may give it a significant edge over the existing Asian competition and budget airlines.
Earlier this year, Tallink ordered a $283m LNG-powered ferry at Rauma Marine Constructions. The 50,000-gt, 2,800-passengership is set for delivery in January 2022, which may free up some tonnage for it to be deployed in Asia.