Channel tunnel operator Eurotunnel has unveiled a turnaround plan involving redundancies and service cuts, as it tries to cut its £6.4bn ($12bn) debts.
Eurotunnel hopes Project Dare will reverse its fortunes
The firm is in talks with its banks but warned that even then it would still be in a "vulnerable position".
Eurotunnel said revenue had dropped by about 4% in the third quarter from the same period in 2003.
"Project Dare" intends to address the increasing competition Eurotunnel faces from ferries and budget airlines.
A company spokeswoman told BBC NewsOnline that, like other operators, they had been hit by low prices from Speed Ferries, which offers return fares from as low as £50.
The firm is also still being affected by the huge costs of building the tunnel, which opened in 1994.
Eurotunnel expects to make a decision on job and service cuts by early next year, in a bid to boost operating margins by £70m in 2007, the spokeswoman said.
It also plans to change its truck shuttle service for road hauliers and introduce a new commercial strategy for passenger shuttles.
The company currently employs 3,100 people, with 1,200 based in the UK.
The number of cars and coaches using its shuttle service fell by 14% in the 12 months to July.
Chief executive Jean-Louis Raymond said in the three months to 30 September the numbers of cars it transported had dropped by 5%, compared to the same period in 2003.
Mr Raymond took over as chief executive of Eurotunnel after the company's 7 April annual general meeting in Paris, at which its shareholders voted to dismiss the previous board and elect six new directors.
Eurotunnel said competition with the ferries had forced it into a permanent cycle of promotional activity.
"These measures alone will not be sufficient to safeguard our future beyond the demanding challenge of the next two years," Mr Raymond said.
"In reality the financial structure of the group remains fragile and the high financial charges continue to impact on operating results."
Eurotunnel shares in London fell more almost 3% after the announcement.