Newspaper article The Christian Science Monitor
Air, Sea, or Undersea? `Chunnel' Services Bid for Passenger Loyalty
IN the air, on the sea, and under the sea, the battle lines are being drawn in a tussle for passengers traveling between Britain and the European continent.
Eurostar, the new passenger service on high-speed trains using the Channel Tunnel, has set a low round-trip fare of 95 (US$153) from London to Paris and from London to Brussels when services begin Nov. 14.
But British Airways, Air France, and other airlines will undercut the Eurostar fare on the same routes by at least 12, and sea ferry operators say they are prepared to go much lower in a bid to meet the challenge posed by travel via the "Chunnel."
The long-delayed Oct. 17 announcement about regular Eurostar passenger services came on the same day that Eurotunnel, the company operating the undersea railway, admitted that it expects 1994 revenues to be one-fourth of forecasts made last May.
Eurotunnel said because of delays caused by technical problems and late delivery of equipment, it would generate only 34 million this year, against 135 million forecast.
Sir Alastair Morton, Eurotunnel chairman, said the first nine months of 1994 had been "frustrating and difficult." He denied newspaper claims that his group would have to go back to investors for more cash. "We believe we are getting into the position to be able to deliver the goods," Sir Alastair said.
Eurotunnel sources, however, admit that investors in the Chunnel will not begin to make a profit from their shares until sometime after the 21st century.
Last May, Eurotunnel persuaded a syndicate of 220 banks to provide 700 million to back a 1.6 billion refinancing package.
The cost of the Chunnel so far is put at 11 billion. Queen Elizabeth II and French President Francois Mitterrand inaugurated the Chunnel last May. Since then, the only regular service has been for freight trains.
Regular Eurostar passenger services begin next month with two daily round trips between London and both Paris and Brussels, Monday to Friday. …