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New P&O fares signal Channel price war

THE FIRST signs of a price war on the Channel emerged yesterday when P & O, the market leader, announced that it would not be increasing its fares for Dover-Calais next year.

P & O, which has about 60 per cent of the cross-Channel market, is attempting to pre- empt fares announcements by rival ferry operators and, more significantly, Eurotunnel.

On routes which will be less affected by competition from the tunnel, P & O has increased fares: Portsmouth- Le Havre is up by 3 per cent, Portsmouth-Cherbourg by 5 per cent and Portsmouth- Bilbao by 5 per cent.

Fares on the Dover-Calais route for a car and up to eight passengers range from pounds 139 at off-peak times to a summer maximum of pounds 320. P & O expects to carry a record 14 million passengers and about 2.8 million cars this year on its six main Channel and North Sea routes.

Britanny ferries is expected to announce its fares within a couple of weeks, and Stena Sealink will follow suit later this autumn.

In previous years, the first brochures have often been pre-emptive strikes in fares wars, but P & O said yesterday: 'We're printing 700,000 copies of this one, which shows that we are committed to it.'

Last January, Eurotunnel announced broadly similar fares to those of the ferry companies for its cross-channel Le Shuttle service, but in the event the start of the service was delayed and the brochure was scrapped. Eurotunnel now hopes to start special services for its shareholders and bankers early next month, building up to a commercial service by the end of the year.

In the meantime, a Eurotunnel spokeswoman said last night: 'We will only be announcing our fares shortly before we start a commercial service.'

While both sides say they will avoid a price war, many analysts suggest that one is inevitable given that the tunnel will virtually double cross- Channel capacity.