Analysts said the figures provided further evidence that consolidation among ferry operators was only a matter of time.
P&O said the number of tourist vehicles using its Dover-to-Calais service fell by 23 per cent in the first three months of this year, and the number of ferry passengers carried dropped by 17 per cent.
"Carryings continued to fall as Eurotunnel's Le Shuttle service approached its natural share of the market," the company said.
The news came as P&O denied reports that it was planning to merge its cross-Channel operations with its rival, Stena Sealink, in a bid to meet the increasing challenge of Eurotunnel head-on.
"We have absolutely no plans at present for such rationalisation," a P&O spokesman said.
But P&O has not ruled out the possibility of forming cost-cutting alliances at a later date. "We have always said rationalisation is inevitable on the cross-Channel route," the spokesman added.
Stena Sealink also dismissed the stories, but its managing director, Gareth Cooper, recently said fierce price competition from Eurotunnel may force leading ferry companies to restart merger talks.
The Government originally blocked such a move between Stena and P&O three years ago, but market conditions have changed considerably since the tunnel was opened two years ago.