1 JANUARY - 31 DECEMBER 2004 - Minoan Lines

5.THE INDUSTRY
5.1 BUSINESS - THE SHIPPING SECTOR
General
The Greek shipping business constitutes since long time one of the most significant sectors of Greek economy. In
particular, for the sector of coastal shipping beyond the financial contribution in home economy, of great importance
are also the services that it renders connecting our country with the other countries of Europe as also the
hundreds of islands of the Greek archipelago.The sector of Greek coastal shipping has shown a potential progress
in the last decades, with continuous improvements of the existing fleet and large investments in building new ships.
In 2004 despite the initially optimistic prospects owing to the performance of the Olympic Games in Greece, so
the tourist sector as also the sector of passenger shipping were seriously hit by remarkable decrease in tourist
traffic, a fact that affected drastically the income of the companies.The decrease in tourist traffic was worst during
the two-month period, July-August that of high tourist demand, which in fact is the most productive season for the
sector.
Adriatic Routes
The market of Adriatic sea is known for its seasonal tourist traffic since the demand for transport of passengers
and private cars is higher in summer months while the transport of goods by trucks remains invariable throughout
the year.
The routes Greece-Italy as also all the other pure international routes operate in a regime of full deregulation
under-strong competition between the companies operating in the field.
In general, there are two categories of companies operating in shipping, those, which provide services all year round,
and those, which provide services over the period of high tourist demand for passengers and automobiles.The latter
are inclined to offer services of lower quality using old ships which are withdrawn during winter season.
Greek coastal shipping
In the domestic sea lines are deployed conventional (ferry boats) as well as ships of new technology.
Greek coastal shipping has recorded considerable progress over the last years, through a progressive improvement
and renovation of the old ships and mainly by putting on route newly built modern ships. In addition, it has been
improved the quality of the services provided with more frequent and fast itineraries.
From the 1st of January 2004 the legal framework within which is invited to operate the Greek coastal market has
changed.The current institutional framework is governed by the recent L. 2932/2001, which introduces the free and
easy provision of services in maritime traffic and transport in domestic sea lines.
Position of MINOAN LINES in the market of Adriatic Sea
International lines
The MINOAN LINES operates successfully since 1981 in Adriatic Sea and particularly in the routes connecting the
ports of Patras and Igoumenitsa with the northern ports of Italy (Ancona and Venice).The company was the pioneer
of the tendency to introduce newly built ships that prevailed in the previous years.
From 1995 till today the MINOAN LINES have put on route, in total, 8 newly built ships in the international lines
between Greece and Italy renovating completely their fleet and improving significantly the level of service rendering.
The Company restructured its fleet following the sale of the two ships PROMETHEUS and ARIADNE PALACE 1
(OCEANUS) and despite the fact of the decrease in tourist traffic improved the volume of its business.The total
movement of passengers, private cars and trucks as well as the share of the market, in the ports where the
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