Abstract
The outcome of competition between Eurotunnel and its main rivals, the cross-Channel ferry companies, has been the subject of great speculation in recent years. Some believe that the Tunnel will prove popular with the consumers and provide a significant return for its shareholders. Others believe that it will have difficulty attracting traffic from the ferry companies and that it will prove a financial disaster. This chapter presents a relatively simple model of cross-Channel competition and uses it to evaluate the likely outcome of competition between the ferry companies and Eurotunnel. The chapter also assesses the viability of Eurotunnel’s initial pricing structure.1
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Dormard, S. (1988) ‘Essai de Modélisation du Marché de Transport Transmanche’, in Policy Responses to the Channel Tunnel (Channel Tunnel Research Unit, Kent University).
Duchene, G. (1988) ‘Faudra-t-il reglementer le Tunnel sous la Manche?’, Les Cahiers du CRAPS, Lille University II.
Eurotunnel (1987) Share Prospectus.
Eurotunnel (1991) Rights Issue Prospectus.
Gerardin, B. (1994) ‘Tarification et financement du Tunnel sous la Manche’, mimeo.
Kay, J., A. Manning and S. Szymanski (1989) ‘The Economic Benefits of the Channel Tunnel’, Economic Policy, 8.
Kay, J., A. Manning and S. Szymanski (1990) ‘Pricing a New Product: The Case of Eurotunnel’, Business Strategy Review, vol. 1, no. 2.
Manning, A. and S. Szymanski (1988) ‘Price Increasing Entry: Who’s Afraid of the Channel Tunnel’, Birkbeck College Working Paper 88/3.
Monopolies and Mergers Commission (MMC) (1989) Cross Channel Car Ferries (London: HMSO) Cm 903, 848.
Okeahalam, C. (1994) ‘Modelling the Probability of Travellers using the Channel Tunnel’, Manchester Business School, mimeo.
Spiekermann, K. and M. Wegener (1994) ‘The Regional Impacts of the Channel Tunnel in Europe’, Dortmund University, mimeo.
Szymanski, S. (1991) ‘The Optimal Timing of Infrastructure Investment’, Journal of Transport Economics and Policy.
Szymanski, S. (1993) ‘Making Hay While the Sun Shines’, Imperial College Management School Discussion Paper.
UK Department of Transport (1988) Kent Impact Study: Overall Assessment (London: HMSO).
Vickerman, R. (1987) ‘The Channel Tunnel: Consequences for Regional Growth and Development’, Regional Studies, 21, pp. 187–97.
Editor information
Editors and Affiliations
Copyright information
© 1997 Applied Econometrics Association
About this chapter
Cite this chapter
Szymanski, S. (1997). Rational Pricing Strategies in the Cross-Channel Market. In: Quinet, E., Vickerman, R. (eds) The Econometrics of Major Transport Infrastructures. Applied Econometrics Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-13977-4_6
Download citation
DOI: https://doi.org/10.1007/978-1-349-13977-4_6
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-13979-8
Online ISBN: 978-1-349-13977-4
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)