Fares rise when the boat comes in

Passengers have seen a 25 per cent increase in prices since the end of duty-free

Cross-channel ferry passengers are this year facing average fare increases of 25 per cent as operators try to make up for the abolition of duty-free shopping.

Cross-channel ferry passengers are this year facing average fare increases of 25 per cent as operators try to make up for the abolition of duty-free shopping.

And day-trippers, travellers who used to spend the most on duty-free, are experiencing even greater price rises. Many passengers will only have discovered the fare increases this weekend, traditionally one of the busiest of the year for the channel's sea lanes.

A spokesman for P&O Stena, the largest cross-channel operator, said: "The real increase has gone on in the last two years due to the withdrawal of duty-free and the rise in fuel prices. Ferry companies did say that this would happen."

He estimated that while the average cost of crossings was up by about a quarter compared to last year, daily return trips were costing up to six times as much.

The abolition almost a year ago of duty-free has deprived operators of a vital additional source of revenue worth up to £500m a year. The cost of fuel, meanwhile, has been driven up by the near-trebling of the price of oil since last year.

The impact was demonstrated earlier this month when P&O Stena unveiled first-quarter losses of £11.4m, compared to profits of £3.5m in the previous quarter. P&O Stena also highlighted the effect of Eurotunnel, which has grabbed a share of its freight business.

Apart from higher fares, ferry companies have responded to their straitened circumstanes by introducing "fluid" pricing. For the first time, passengers have this year found operators unwilling to publish in their brochures guaranteed prices of forthcoming crossings. Those passengers who enquire by telephone about the cost of fares are warned that the price quoted is valid only for the duration of the call. This flexibility enables operators to hike or lower prices according to demand, in much the same way that airlines and hoteliers already do.

In addition, last February P&O Stena introduced a door-to-door car-importing service in another attempt to make up for the shortfall left by the abolition of duty-free. Some ferry companies have also boosted the productivity of their ships by reducing the duration of journeys, a move that enables them to make more crossings a week.

However, there has been criticism from other quarters that operators have been given free rein to hike their prices because the market is so uncompetitive. A report earlier this year by the Consumer Association observed that, apart from the Dover-Calais route, passengers travelling on each of the longer routes had only one operator to choose from.

It said: "Travellers have no choice other than to fork out for whatever fare is quoted."

"Prices have been going up for the last few years," said another source. "Apart from Dover-Calais, it's not a very competitive market. There is an unofficial cartel at work."

However, Bill Gibbons, director of the Passenger Shipping Association, the trade association of ferry and cruise companies, rejected the suggestion that customers were getting a raw deal.

"Real prices are still cheaper than in 1994," he said.

The P&O Stena spokesman added that the ferry industry remained competitive because the barriers to new entrants joining the market were so low. Its main cross-channel competitor is Brittany Ferries. In any case, the Competition Commission has imposed constraints on the ability of P&O Stena to raise prices as one of the conditions of its approving the Anglo-Swedish joint venture two years ago.