Eurotunnel 'on track' despite loss

Eurotunnel slumped to a full-year loss today as a long-running dispute over insurance payments arising from a fire in 2008 offset a rise in passenger numbers.

Higher debt costs also impacted on the Channel Tunnel operator but revenues increased 26% to €737m in 2010 following an 11% rise in car traffic to more than 2.1 million.

The number of truck journeys leapt 42% to almost 1.1 million but remains below the pre-recession level seen in 2007.

The group made losses of €57m, compared to a profit of €7m the previous year.

The log-jam has been caused by legal claims brought jointly by Eurostar and SNCF against Eurotunnel's insurers. The fire led to one section of the tunnel being unavailable between September 2008 and February 2009.

Shuttle service revenues improved 15% to €366m as Eurotunnel said more travellers viewed the tunnel as cheaper and more flexible than flying. Market share increased by almost two percentage points to 43% in 2010, it added.

The ash cloud from an Icelandic volcano, which grounded air traffic in the spring, also helped to increase passenger numbers.

Revenues from rail operators including Eurostar, which pays to use its tracks, increased by 3% to €263m.

Eurotunnel said it expects to add an additional 3 or 4 million train passengers over the next few years as it runs a number of new services.

Eurostar, whose passenger numbers increased by 3% to 9.5 million last year, is set to introduce new services to Amsterdam, Switzerland and the south east of France.

And German operator Deutsche Bahn is preparing to launch direct services between London and major cities in Holland and Germany in the next two years.

Eurotunnel is also planning to reinstate one of its trains, which it mothballed in 2005, to boost traffic in time for the London Olympics in 2012.

Eurotunnel said it could benefit from the soaring price of oil as more passengers take the train overseas.

Travel firms Thomas Cook and Thomson have recently brought in fuel surcharges and the operator of the Channel Tunnel expects other operators, including ferries, to put up prices if fuel prices continue to rise.

But its own business would be "almost unaffected" because its rail services are mainly powered by electricity from nuclear generators and hydroelectric plants.