Posted 18th January 2021 | 9 Comments
Eurostar risks collapse as Covid restrictions bite
Updated 11.22
EUROSTAR is in crisis and reported to be near collapse, after months of very low passenger figures caused by the Covid pandemic and the resulting travel restrictions between Britain and the continent, which have now been tightened again.
The operator is running just a couple of trains a day, and is thought to be facing losses which could amount to as much as £1 billion by the end of this year.
Unlike the formerly franchised passenger operators in Britain, whose businesses have been taken under government control, Eurostar has so far received no financial support from the UK government.
Critics are also contrasting Eurostar’s plight with airlines which have received some support, although they are said to need far more.
Just over half of Eurostar is owned by the French state railway SNCF, but France has also been slow to react. Another 40 per cent is owned by private investment houses, which bought the original British stake in 2015. The last 5 per cent is owned by Belgian Railways.
Labour shadow transport secretary Jim McMahon said: ‘The pandemic has hit Eurostar extremely hard, as it has many businesses, and the ban on travel corridors will leave the service in an even more precarious position. The Government must act to secure our economy, and protect UK jobs and infrastructure.
‘We need to see a comprehensive strategy for our regional, national and international railways which goes beyond the current franchise support programme to address the impact of Covid-19 on operations like Eurostar.’
The RMT is calling for ‘urgent, decisive and co-ordinated action’. The union’s general secretary Mick Cash added: ‘It is clear that Eurostar is standing on the brink of collapse and we need urgent Government action to protect the thousands of jobs and vital infrastructure link to the Continent that now hangs by a thread.
‘Eurostar has not benefited from the kind of financial and practical support that has been made available to the airports and ground operations. That needs to be put right as a matter of priority.’
In addition, the BBC has reported that a group of London business leaders has written to the government calling for Eurostar to receive state aid. The letter requests, ‘at the very least’, that Eurostar should have access to government loans and business rates relief.
The Department for Transport has repeated previous statements that it is in talks with Eurostar, adding: ‘We will continue to work closely with them as we support the safe recovery of international travel.’
Eurostar has confirmed that it has held similar talks with the French government, but so far apparently without result. Eurostar said access charges are ‘considerably higher’ on HS1 between the Folkestone Channel Tunnel portal and London, ‘hence that being more of a focus’.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Chris, Glasgow
The infrastructure and rolling stock are not going anywhere. They will be there when London-Paris & Brussels travel returns to normal. It looks like the French state is on the hook for this.
Since Eurostar is a UK based company, if it goes into administration it will be dealt with under UK law. I don't see any need for the UK government to intervene for at least the time being. If there was opportunity to take significant shareholding, say buying it out of administration, then it may be useful proposition. But there is no rush.
Peter Merrington, London / Berlin
I have travelled by all modes between London and northern Germany since the mid-1980s. During Brexit it became clear that, while Britain was negotiating transparently, the EU had a punishment agenda to deter other States -Poland, Hungary, Italy come to mind- from doing the same. France is a great subsidiser of State projects. Given that Quebec and Belgium are francophone and speak for 90% of the holding company, Macron's reluctance to support Eurostar is suspicious, to say the least. .
Michael Breslin, Liverpool
It would seem to me that Eurostar may indeed require some sort of assistance
in the near future but, as others have said, the UK does not have any financial control of the company. Perhaps someone could explain whether the UK government can inject some funding into Eurostar without first acquiring a shareholding. The alternative would surely mean the government asking the French government (owners of the majority shareholders) to boost their funding of the company.
Neil Palmer, Waterloo
It's amazing how many have their heads in the sand thinking this is NOT a UK problem. Letting Eurostar collapse now, while we're starting to feel the impacts of Brexit and hoping to maintain trade and business links to Europe, would be shooting oneself in the foot. Whose economy do you think benefits more from having Eurostar, the EU or UK? If you say EU you're simply wrong. Does the government really want to have a large increase in short haul flights (ignoring their Green requirements) once the impact of Covid is over?
It's rare I say this, but Mick Cash is right.
Melvyn, Canvey Island , Essex
Worth remembering the company that built the Chunnel went bust but tge chunnel was built and another owner took it on ...
Given the way Eurostar has operated and the lack of through fares to the rest of Europe many would prefer the existing company to go bankrupt and be replaced with one that is more business led in development of through fares and services helping to replace short haul airlines from European transport!
If anything Eurostar should get preferential treatment to airlines when it comes to restoring links to Northern Europe from U.K post covid19
John B, London
So be it. Let's reinvigorate our coastal towns like Newhaven, Portsmouth and Ramsgate and their excellent ferry links to the continent. Goodbye Eurostar, hello Golden Arrow from Victoria.
[You may wish to live in the 1950s, but I suspect you are in the minority!--Ed.]
Harry, Cheltenham
To be correct the operationg Company is EIL a single management company set up on on 1 September 2010. EIL is owned by SNCF (55%), Caisse de dépôt et placement du Québec (CDPQ) (30%), Hermes Infrastructure (10%) and NMBS/SNCB (5%).
I don't see any UK ownership there. Ask SNCF and the Canadian government.
[That doesn't change the fact that Britain will need its railway to the continent again, does it?--Ed.]
Pete, Birmingham
Our green travel link to the mainland. Are we really happy for it to disappear and return to more short-haul flights? Many 'British' TOCs are owned by European Rail operators and are being supported by our Government.
harry, Cheltenham
Hang on, Eurostar is owned by the French, ask them for help, it's nothing to do with us.
[The French actually own 55 per cent of Eurostar. Irrespective of ownership, many people, including business and tourism leaders, believe that our only rail link with the nearest continent is quite a lot to do with us!--Ed.]