Newcomer sells time factor: Christian Wolmar on a spartan product offered at a similar cost to the opposition

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The Independent Online
FEAR of travelling in the tunnel, entrenched travel habits and the improvement in ferry services all mean Eurotunnel faces an enormous task to reach its target of capturing half the cross-Channel market for cars by 1996. Failure to do so could result in a financial crisis in the company, which must pay pounds 600m a year in interest payments alone to stay solvent.

Eurotunnel is offering a spartan product, at a price comparable with that of its main rivals - though considerably more expensive in the winter - in the hope that the prospect of a faster journey will attract customers. Its biggest worry is that the time savings will not be realised, or that customers will not perceive them as sufficient to offset other disadvantages.

The journey time is 35 minutes, the same as for the hovercraft, but 40 minutes quicker than the ferry. However, ferries also require cars to arrive 20 minutes before departure and, with 10 minutes to disembark, makes a total of 105 minutes from motorway to motorway, compared with the hour by tunnel.

For the tunnel, the frequency in the summer will be 15 minutes, but with no pre- booking, travellers may well have to wait at peak times before being able to embark. Eurotunnel has also calculated it will take eight minutes to load or unload a train, an optimistic figure given that it involves a difficult driving manoeuvre. Any hitch and the time savings could be quickly reduced. And anyone wanting a meal or duty-free goods will have to stop at the terminal building, whereas ferry passengers are able to buy them on the boat.

The journey in a compartment with no facilities, small windows and the remnants of exhaust fumes from the vehicles, contrasts poorly with the huge, well-equipped boats operated by the ferry companies, which are equipped with stabilisers that give relatively comfortable trips even in stormy conditions.

On the other hand, there will be many travellers happy to avoid the floating supermarket atmosphere of the ferries, characterised by burly beer-swilling youths sporting Union flag T-shirts. Travel trade analysts are already reporting a big interest in the tunnel and there will undoubtedly be a novelty value that will initially attract passengers. But if the journey is delayed, or people find the compartments unpleasant, Eurotunnel will not gain the vital repeat market.

The tunnel's one big advantage, as Christopher Garnett, Eurotunnel's commercial director, always stresses, is that it, unlike its competitors, will not be subject to the vagaries of the weather.

Another risk for Eurotunnel is being drawn into a price war, but the ferry companies have learnt from previous such battles that there would be no winners - and Mr Garnett has repeatedly said that Eurotunnel will avoid such a confrontation.

The big gamble taken by Mr Garnett and his colleagues is to have plumped for a no-booking system. The psychology behind the move is that they want the tunnel to be seen as a kind of rolling motorway linking Britain and France. As Mr Garnett said yesterday: 'You don't have to book to go on the M25.'

This is a brave notion. Ferry operators claim that, although a high proportion of people do not travel on the actual ferry for which they have booked, at least they have the confidence of a ticket which guarantees them travel. The British do not like uncertainty and many are likely to be put off by the lack of a booking, especially if there are large queues at the tunnel entrance during its first weekends of operation.

Eurotunnel yesterday said there is certain to be some 'rationalisation' in the cross- Channel market following its arrival, which will eventually double the available capacity. But the ferry companies are currently very profitable and will fight their corner. Stena Sealink and P&O are hoping the Office of Fair Trading will allow them to provide a combined service, offering two sailings per hour.

Even if this happens, it is unlikely Eurotunnel's rivals will escape unscathed. Analysts suggest the hovercraft service, which combines an uncomfortable journey with speed and currently has about 10 per cent of the market, may be the first to suffer from the tunnel's arrival.

Eurotunnel's fate may, in the end, be determined by the fear factor. Although the safety standards imposed on Eurotunnel are extremely rigorous, much higher than on existing transport systems, the public has yet to be convinced. Eurotunnel must ensure that there is no incident, however minor, in its first months to gain the public's confidence. Only then will people hop on Le Shuttle with as little concern as taking a bus or train.

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