Tunnel fights back in battle for the Channel

Ferry v Shuttle: Stakes are raised in the competition for trade as Eurotunnel prepares to report a healthy increase in travellers

CHRISTIAN WOLMAR

Transport Correspondent

Eurotunnel is hoping that figures for August, to be released next week, will show that it has won a 25 per cent stake of the cross-Channel passenger and car market. Each of the ferry operators is believed to suffered 6 to 7 per cent cuts in their level of business.

Although the number of passengers was about 10 per cent up on last year, Eurotunnel's achievement is certain to result in an escalation of the battle for business. Competition is set to become fiercer with more boats and extra capacity on the tunnel route becoming available.

While commentators had expected this year's battle to end with bloodied noses and retirement for at least one of the competitors - even possible bankruptcy for Eurotunnel - all have survived, and the three main protagonists are talking about increasing or at least maintaining capacity for next year rather than reducing it.

Aggressive discounting and heavy publicity campaigns, helped the ferry companies to increase their passenger flows by around 20 per cent for the first six months of this year, but in July and August overall numbers on the ferries have fallen.

Ian Todd, P&O's public relations manager, said there were a number of reasons apart from competition with Eurotunnel: "The franc has been amazingly high and this has put people off from going to France. And the good weather in Britain means that many people who were going to book late holidays decided to stay at home instead and enjoy a bit of free sunshine."

Eurotunnel's performance of taking about a quarter of the market is seen by analysts as reasonable but not earth-shattering. "Any less would have been disastrous," said a City source.

The tunnel has been particularly successful in attracting freight from the ferries, and on the route from Dover/Folkestone to Calais it became the market leader in July. However, if other routes such as Dover-Zeebrugge are taken into consideration, Eurotunnel still lags behind P&O. Analysts suggest that Eurotunnel has been offering its freight customers - and to a lesser extent its tourist passengers - large discounts which have enabled it to buy market share.

This bodes well for travellers. Already P&O says that it is keeping its fifth ship on the Dover-Calais route for this autumn, rather than reducing its capacity for what in the past has been a quiet season. Eurotunnel has spare trains that it could start running if demand goes up, and Stena - which recently split from its French partner SNAT - says it is increasing the number of its ships from three to four by 1 January, and may introduce a fifth next summer. SNAT has said it will keep its two ships on the route.

The ferry operators, who make a large part of their profits on selling duty-free goods and meals, seem happy to maintain capacity even though it makes discounting inevitable.

tEurotunnel has launched an investigation into the circumstances that led to a car-load of travellers becoming trapped inside a train after it arrived at Calais. The five passengers had to force open an emergency door after being stranded for 45 minutes when the main doors failed to open. They repeatedly rang for attention and smashed the fire alarm, but failed to alert anyone to their predicament. The incident happened last Saturday.

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