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. The first-class fare during the initial period will be 195, round trip. British Airways' first-class, round-trip fare is more than 300.

SOME time next year, Eurotunnel management says it will review its strategy and may lower fares. The company says it plans to make 30 round-trip runs each day through the Chunnel by mid-1995. It may then have a better idea of how popular undersea rail travel is compared with flying or crossing the Channel by passenger ferry.

Sir Alastair says the London-Paris journey, city-center to city-center, will take about three hours. British Airways and Air France officials say they can match that time but concede that passengers will have to pay for transport between airports and cities at both ends of their journey in addition to airfare.

The sea ferries' appeal is that fares are already as low as 58 for a round trip. Travelers can watch movies and eat full meals. They must then go by rail or road to reach coastal ports in Britain, France, and Belgium, which more than doubles the travel times Eurostar and the airlines are aiming for.

Eurostar trains can reach their top speed of 186 miles per hour only in France at present, as the French are the only ones to have a high-speed rail link in place. The Belgian fast link should be completed in 1997, but the 3 billion British one probably will not be ready until around 2004. Until then, the Eurostar trains will travel through the English countryside at speeds of up to 100 m.p.h.

Eurostar hopes for better luck with its regular services than it had last week when a train on a test run from Paris to London via the Chunnel broke down.

Other British Rail services were disrupted for more than an hour.

Sir Alastair claims that within about 10 years, the Chunnel will have taken about one-half of the airlines' current cross-Channel business away from them.