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P&O offers a fare freeze
Page 96
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• P&O European Ferries has offered to freeze its contract rates for freight and coach operators for a year with an adjustment for inflation as the battle with the Channel Tunnel takes a new twist.
However, in a letter to the Office of Fair Trading, P&O says that it will only hold prices on short-sea routes to France if it can co-operate with other ferry companies to produce a joint service.
Ferry companies are cur rently forced by law to work separately, The OFT, whose job it is to advise Trade Secretary Peter Lilley, is not expected to make a recommendation for at least a month. It could advise LiIley to withdraw the non-co-operation ruling, to keep it, or to refer the matter to the Monopolies and Mergers Commission for further investigation_ Sealink Stena Line says that it will wait until the autumn before it considers joining with P&O to push for a joint service. Sealink, which claims to have around 47% of cross-Channel freight traffic, wants to see the results of its cost-cutting programme before making a decision.
A proposal for a joint ferry service between Dover and Calais was rejected in July 1989. At that time Trade Secretary Nicholas Ridley told the ferry companies to make a renewed case for a joint service nearer the opening of the Channel Tunnel.