INTENSE price competition and over-capacity have been blamed for another fall in traffic through the Channel Tunnel.

The number of cars and lorries using the Shuttle dipped sharply in the three months to September, underlining just how tough the cross-Channel market has become.

P&O recently announced it was axing 830 jobs in Dover in the wake of falling demand for ferry travel.

Jean-Louis Raymond, Eurotunnel's new French boss who replaced Kent-based Richard Shirrefs as chief executive after a shareholder coup in April, described the results as "not satisfactory".

They demonstrated that the company's previous strategy "was not adjusted to market trends in terms of capacity and pricing," he said.

The company is completing a thorough review of the situation and is due to present its findings and three-year plan to banks at the end of October.

Revenue from Shuttle Services fell eight per cent to £77.7m, while total operating revenue was down four per cent to £140.1m.

But income from Eurostar and other railway operators rose by two per cent to £58.8m, cushioned to some extent by the Minimum Usage Charge guaranteed until November 2006.

Truck traffic fell by four per cent to 302,445 trucks over the third quarter a year ago. Eurotunnel blamed over-capacity and intense price competition as market share fell to 38 per cent.

While the overall cross-Channel car market dipped by just one per cent, following a further reduction in day trips and short breaks, Eurotunnel suffered a five per cent fall. It carried 605,984 cars, compared 639,064 in the same quarter last year. The company said it was more sensitive to changes in these sectors of the market.

It also cited "aggressive pricing" by SpeedFerries, the new high-speed catamaran operator between Dover and Boulogne, which appears to have taken business away.

Eurotunnel had responded with promotion offers that had limited the effects but caused revenue to fall.

The number of coaches carried by Eurotunnel fell by 13 per cent from 17,892 coaches to 15,650 in a market that was down four per cent.

The number of Eurostar passengers travelling through the Tunnel continued to grow, from 1,772,684 in the third quarter of 2003 to 1,997,800 in the third quarter of 2004, an increase of 13 per cent. Rail freight tonnage rose seven per cent to 472,163.