EUROTUNNEL'S cost-cutting drive that will see 450 jobs go in Kent has also affected services.

The Channel Tunnel operator has responded to flat demand and intense price competition from ferries and low-cost airlines by reducing off-peak passenger shuttle services and mothballing one of its trains.

The Channel Tunnel operator, which announced on Thursday that 900 jobs were being axed in Cheriton and Calais, claimed that more stable revenue was achieved by "better alignment of capacity to demand".

The reduction took place in September after Eurotunnel chose to improve its margins, reduce costs and increase load factors under its Project Dare strategy.

A spokesman said the services affected were mainly in the middle of the day and late at night. "We can still offer a set number of departures at peak periods," he said.

Shuttle service revenue was up just one per cent at £77.9 million in the third quarter of the year after carrying 605,984 cars.

There were contrasting fortunes for the freight and passenger shuttle businesses, with freight revenue up significantly.

Although the number of trucks fell slightly to 295,230, Eurotunnel’s change of strategy has boosted average yield.

The company rewards regular customers with special deals. It has also ditched its outsourced sales and marketing company for small and medium-sized hauliers and taken it back in-house.

Operating revenue in the third quarter of 2005 was £140.8 million, an increase of one per cent compared with the third quarter in 2004.

The number of passengers travelling by Eurostar fell but Eurotunnel received £16.9 million under the minimum usage charge. This arrangement ends next year.

The volume of rail freight tonnage - 362,431 tonnes - during the quarter was once again down, this time by 23 per cent.

Eurotunnel earned £4.2 million from other activities, including an indisclosed sum for the sale remaining development land at Orbital Park, Ashford.