£49 shuttle fare starts Channel price war

Eurotunnel undercuts ferry rates with winter deals on car service

A price war on cross-Channel fares was signalled yesterday by Eurotunnel when it announced cheap winter deals on its car shuttle services.

Announcing fares from the start of the service on Thursday to the end of March, Eurotunnel's commercial director, Christopher Garnett, said motorists taking their car for a day trip will only have to pay £49. This compares favourably with the published fares of the two main ferry companies which for December are £72.

However, both P&O and Stena Sealink said they would be continuing the practice of previous years of having special offers in the slack January to March period which would be around £20 for the car plus £1 for passengers as this enables them to keep theirships, which have turned into floating supermarkets, running through the winter.

Eurotunnel appears to have learnt from its past mistakes. Last January it announced fares for its service, which was then due to start in May, that were in line with the peak summer fares of the ferries. This time it has attempted to undercut the ferriesand has not announced its summer fares until it is certain that it will be able to operate its full service of four shuttles per hour.

Eurotunnel also says that until it can run more trains, passengers will be able to book. Previously, Eurotunnel had said it would only operate a "turn up and go" service.

Initially, there will be one shuttle per hour in each direction with a capacity of 120 cars every day from 8am to 8pm and Eurotunnel hopes in January that the service will become 24-hour.

However, Ian Todd, P&O's spokesman, dismissed the prospect of competition from the tunnel: "They are running one shuttle per hour with room for 120 cars, while we have a ship going every 45 minutes with room for five times that number and Stena has one an hour with similar capacity."

Mr Garnett denied that Eurotunnel was entering a price war: "Our prices are competitive. While we will not enter a price war, we are confident that we will attract customers to our fast, reliable and hassle-free system."

Mr Garnett hopes that people will be attracted to try the Channel tunnel as a result of the lower fares and then use it to book summer holidays at the premium rate. He said yesterday that he was confident that Eurotunnel would meet its target of obtaining just under 50 per cent of the cross-Channel market by the end of 1996.

However, many travel experts feel that Eurotunnel faces an uphill task because the journey through the tunnel is spartan compared with the modern ferries which offer shopping, restaurants, duty-free,and views of the white cliffs of Dover.

However, the tunnel is undoubtedly quicker, with Eurotunnel promising motorway to autoroute in an hour, compared with over two hours on ferries.

The opening of the car shuttle services next Thursday means that all four services through the tunnel - Le Shuttle car and freight, Eurostar, and through freight trains - will all be bringing in revenue to help Eurotunnel begin to pay off the £10.5bn cost of the project.