Sir Alastair Morton, chairman of Eurotunnel, has continually criticised the ferry industry for "suicidal" price wars and other such competitive activity. Indeed, according to him, it is the actions of the ferry industry which have done so much to destroy the cross-Channel market. But his criticism is nonsense, as any student of basic economics knows.
Eurotunnel doubled capacity, and then moaned when competitor activity intensified. They tried premium-pricing their product, as they told their shareholders they would, but not enough customers wanted to buy. So now they have given that up and joined the economic world they helped create. In doing so Le Shuttle has become another ferry company. The difference is that it cost its owners pounds 10bn to set up.
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