Summary
Eurotunnel is in a mature market whose growth will broadly be line with wider economic growth.
Analysis
Eurotunnel's business can be split between its shuttle business in competition with the ferries and the longer distance rail (passenger and freight) services that purchase rights to run through the tunnel.
Ferry services survived the opening of the tunnel despite the doomsayers and while marginal routes will come and go the core high frequency/high capacity cross channel ferry routes will continue. The need for driver rest periods and safety limitations on what can be carried through the tunnel will always provide a base traffic for the ferry operators which they can build upon. Governments will also prefer to see a strong ferry business to ensure competition and service security - the tunnel having been subject to restricted capacity due to fires on a couple of occasions.
Through rail services have failed to live up to their wildly optimistic original forecasts. Passenger services will continue to grow in line with the economy which drives overall transport demand. The provision of through services to Amsterdam will lead to a marginal increase. High speed rail services beyond London, if they ever happen, will not occur for 20 years and will not (unless the UK government sees sense on the issue at last) operate through the tunnel - UK international services are not allowed to carry domestic passengers and demand would not sustain direct north of London to the continent services.
International railfreight has been the biggest disappointment and needs new licence holders such as Eurotunnel itself to really push this market although they are likely to be continued to be frustrated by SNCF.
So in summary Eurotunnel is likely to grow its business steadily broadly maintaining present market share with the ferry business in the short to medium term.
John Siraut consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
