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P&O FERRIES has drastically cut capacity to counter growing losses from the sector.

It plans to axe up to 1,200 jobs and six ships to cut costs by £100 million.

All Western channel routes except Portsmouth-Bilbao will be cut, reducing ships from six to one. Pride of Portsmouth and Pride of Le Havre will be chartered out to Brittany Ferries. On the Dover-Calais route, services will be cut by one ship to six, but rescheduling means capacity will not affect peak periods.

The job cuts will hit shoreside and seagoing operations. Out of its 425-strong sales and marketing operations seven positions are at risk. A spokesman said: "The majority of this consultation concerns moving ships and reducing capacity."

P&O’s ferries division reported a £25.1 million loss for the first half of this year. It carried 13.3 million passengers last year, a drop from 14.6 million in 2002.

The restructure’s overall cost benefit is expected to be £55 million annually.

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