* Competition regulator sticks to ban on Eurotunnel ferry operation
* Groupe Eurotunnel says decision is based on wrong analysis (Recasts with regulator's confirmation, adds comment from Eurotunnel, French minister)
COPENHAGEN, May 20 (Reuters) - Britain's antitrust regulator said Groupe Eurotunnel, the operator of the undersea rail link between Britain and France, should remain barred from operating a cross-channel ferry service after it reviewed the market.
Groupe Eurotunnel operator started to operate services on the Dover-Calais crossing in 2012 under the MyFerryLink brand when it acquired three ferries from the now-defunct SeaFrance.
Britain's competition regulator ruled last June that Eurotunnel's acquisition of the ferries was a merger that hurt competition, a decision Eurotunnel appealed. The UK regulator said on March 21 it had the jurisdiction to rule on the case. .
The Competition and Markets Authority (CMA), which replaced the UK's Competition Commission in April, admitted that passenger growth on the Dover-Calais route has been greater than originally anticipated, but at least two of the ferry operators are still making substantial losses.
"MyFerryLink is making losses and being funded by Eurotunnel. This is causing the current level of competition on the Dover-Calais route to be unsustainable and is likely to lead to the exit of a competitor," said Alasdair Smith, CMA Deputy Panel Chair and Chairman of the Eurotunnel Remittal Group.
"Groupe Eurotunnel believes that the CMA's preliminary decision is based upon an erroneous analysis of the significant changes in the cross Channel Ferry market since the Competition Commission's original findings relating to the market in 2012," the company said in a statement.
"Keeping three ferry companies operating cross-channel continues to be the guarantee of effective competition, and the success of MyFerryLink is an obvious illustration of that", said Transport Minister Frederic Cuviller who greeted the decision with "regret" and recalled that he French competition authority had given a positive decision on the situation in 2012.
"This contradictory position between two European competition authorities puts the company in an intolerable position."
As well as Eurotunnel, which operates its vessels under the MyFerryLink brand, DFDS and P&O Ferries also run boats on the Dover-Calais crossing, competing against the rail link for freight and passengers.
Danish ferry operator DFDS, which operate ferries on the route, said it was losing between 8-10 million Danish crowns ($1.47-$1.84 million) a month as a result of MyFerryLink.
The CMA is expected to publish a final decision in June.
For the full CMA statement click on
$1 = 5.4409 Danish Crowns Reporting by Ole Mikkelsen, editing by Louise Heavens