Without additional funding from government there is a real risk to the survival of Eurostar

[MarcVD]

Apparently Belgium decided today that all international train companies (so not only Eurostar but also Thalys and Nightjet) must not pay for their train paths till end June. Infrabel will be compensated for that directly by the belgian government.

 

[StephenHunter]

Nightjet have suspended most of their services until late March anyway.

 

[Techniquest]

I've finally got around to reading this thread, and I'm glad there's talks underway to keep Eurostar going. I've got an adventure planned for when borders re-open, but that would take this thread wildly off-topic.

My options for said adventure are either the ferry from Harwich to Hook of Holland (a journey I'd like to do one day) or Eurostar to Rotterdam. When I looked at fares for 3rd May, one way (as I would potentially be using the other option on the way back), the ferry was €123 including breakfast and a cabin on the overnight sailing. Eurostar was a bargain £49, and I'd have booked that price happily.

The problem there is that of course borders may not reopen by then, and I'm having to wait for authorisation to have the time off work. As cycles are not currently allowed on Eurostar, that's also a concern as that might be the case in May still. Which defeats the objective of the trip!

As for Eurostar being just for the rich? Ha! I've been on Eurostar only a few times, but that's primarily because it's not been so convenient for where I want to go. Last year I revised my travel mission for within Europe, and short hops such as London to Paris/Berlin/similarly close to the UK hops I will not do by air. Unless the rail fare is extremely high, then I would revise the entire trip before considering air travel.

Destinations such as Athens, or other difficult to do by rail options, I would choose a flight. Long-haul is obviously completely different, but within Europe where I can go by rail that is my first choice. So the likes of Eurostar appeal hugely, and I hope to get on board some time this year. Obviously I would have last year, but yeah...

I think my biggest irritance with using Eurostar is the inability to book tickets from UK destinations online. When I last looked, to buy an inclusive ticket from Hereford meant I had to call Eurostar to do it, and that's too inconvenient for my liking. In years gone by, when I could have used Eurostar more often, I was nowhere near a railway station. I was also a Ryanair enthusiast at the time, but let's not go there...

A couple of people I noted reckon there will be a huge burst of passengers flooding to Eurostar when we're allowed out again. I have to agree, even if I have to book my Eurostar and domestic tickets separately I'll be there! It'll be a shame if it's not a 373, but that's just how it's got to be. I've not been on a 374 yet, so I'll be perfectly happy doing that too.

Plenty of us at work have the 'traveller's itchy feet' and are waiting impatiently to be able to go places again. My two main uses for Eurostar, not to mention trips I've not planned, are the aforementioned trip to Rotterdam and a trip to the south of France. Even if the latter is just a hop on Eurostar from London to Lille for a TGV forward to Nice/Marseille, that's fine.

 

[TUC]

Outside of the South East, it is almost always quicker and cheaper to fly than use Eurostar. That in itself is a strong reason not to bail it out.

if it truly is considered a profitable enterprise long term, then it will save millions of pounds of public money to just let it go into liquidation and leave someone to buy the assets.

 

[matacaster]

Outside of the South East, it is almost always quicker and cheaper to fly than use Eurostar. That in itself is a strong reason not to bail it out.

if it truly is considered a profitable enterprise long term, then it will save millions of pounds of public money to just let it go into liquidation and leave someone to buy the assets.

Quite!

 

[JonathanP]

Why does evereyone hate Eurostar so much? I don't get it. Plenty of airlines have been bailed out already. This is no different.

 

[Bletchleyite]

Why does evereyone hate Eurostar so much? I don't get it. Plenty of airlines have been bailed out already. This is no different.

The UK Government wouldn't bail out Air France, so why should it bail out a French-owned train company?

(I don't overly mind if it does provided it does so by buying a stake in Eurostar or indeed Air France, but they should not get free money).

 

[JonathanP]

A Government Bailout is last resort in order save something which not financially viable but too important to be allowed to fail, not a business transaction made with the hope of making a profit at a later stage, or of increasing the dividends collected by the current owners. The current ownership of Eurostar is irrelevant.

The only relevant aspect is how important the company is to the UK. In this case Air France makes flights from France to other countries, most of which are not the UK. 100% of Eurostar Services start or end in the UK.

 

[43096]

Why does evereyone hate Eurostar so much? I don't get it. Plenty of airlines have been bailed out already. This is no different.

Suspect it is the usual "chips on shoulders" from those who don't use it. As I posted before, it's a dangerous road to go down. Plenty of people living in the South East don't use Northern rail services, so why do they subsidise them? Should pay their own way...

 

[TUC]

Suspect it is the usual "chips on shoulders" from those who don't use it. As I posted before, it's a dangerous road to go down. Plenty of people living in the South East don't use Northern rail services, so why do they subsidise them? Should pay their own way...

But if less public money would be needed by letting it go bust and someone buying the assets, why not use that route?

 

[43096]

But if less public money would be needed by letting it go bust and someone buying the assets, why not use that route?

Could just apply the same logic to every part of the economy. Just let the railways go bust and buy up what remains.

 

[TUC]

Could just apply the same logic to every part of the economy. Just let the railways go bust and buy up what remains.

Different model. Aside from open access operators, all of the TOC are vehicles for contracts, not an owner of the right to operate.

 

[RT4038]

Different model. Aside from open access operators, all of the TOC are vehicles for contracts, not an owner of the right to operate.

I thin there are two principles to consider:
1. The lockdown and travel restrictions were mandated by Government and they really have a moral responsibility to avoid bankruptcy.
2. Do unto others as you would have done to yourself. If you owned Eurostar, would you want Government to, in these extraordinary circumstances not of the Company's making. take advantage and rob you of your business? No.

 

[Gloster]

I thin there are two principles to consider:
1. The lockdown and travel restrictions were mandated by Government and they really have a moral responsibility to avoid bankruptcy.
2. Do unto others as you would have done to yourself. If you owned Eurostar, would you want Government to, in these extraordinary circumstances not of the Company's making. take advantage and rob you of your business? No.

You have ‘government’ and ‘moral responsibility’ in the same sentence: these are strange bedfellows. Governments only use the phrase ‘moral responsibility’ when they want to justify something that is in their interests.

 

[MotCO]

What happened in the good years? Did Eurostar give a share of the profits to the UK Government when the UK Government did not own any of it (I'm not including any taxes which are taken before profits are calculated)?

You can't have it both ways. If the UK Government, for example, introduced more bank holidays which encouraged more people to use Eurostar, would the UK Government expect to receive a share of the extra profits? Of course not, so why should any UK Government action lead to financial support to Eurostar?

 

[Bletchleyite]

What happened in the good years? Did Eurostar give a share of the profits to the UK Government when the UK Government did not own any of it (I'm not including any taxes which are taken before profits are calculated)?

You can't have it both ways. If the UK Government, for example, introduced more bank holidays which encouraged more people to use Eurostar, would the UK Government expect to receive a share of the extra profits? Of course not, so why should any UK Government action lead to financial support to Eurostar?

The nominal answer, if they had a British component, is the same as why they've supported any other business.

Of course, they're not, they're French.

 

[JonathanP]

As I said before, ownership is utterly irrelevant here. Eurostar is even only 55% French. 30% of it is owned by Canadian Pensioners.
Does that mean the bailout should come from Canda? Of course not. This has nothing to do with whether a busines "deserves" to be bailed out, or who will benefit financially from it. It's about maintaining a necessary transport link. It's not some kind of insurance policy that only pays out if you paid enough in.

It just makes no sense at all. If the Harwich - Hook of Holland ferry route was in danger of being suspended, would you say that the UK government should just do nothing, because it is run by a Swedish company?

 

[SHD]

Quebecer pensioners to be exact, which makes them French-like, which means that Eurostar is 85% French.

 

[RT4038]

What happened in the good years? Did Eurostar give a share of the profits to the UK Government when the UK Government did not own any of it (I'm not including any taxes which are taken before profits are calculated)?

You can't have it both ways. If the UK Government, for example, introduced more bank holidays which encouraged more people to use Eurostar, would the UK Government expect to receive a share of the extra profits? Of course not, so why should any UK Government action lead to financial support to Eurostar?

Good years taken with bad years. Terrible years (like this unprecedented pandemic) is not in the same league, and shouldn't be treated as such.

 

[Bletchleyite]

As I said before, ownership is utterly irrelevant here. Eurostar is even only 55% French. 30% of it is owned by Canadian Pensioners.
Does that mean the bailout should come from Canda? Of course not. This has nothing to do with whether a busines "deserves" to be bailed out, or who will benefit financially from it. It's about maintaining a necessary transport link.

Which is why I propose that they do provide funding in return for a proportionate stake in the company, which is how the bank bailouts were done.

It just makes no sense at all. If the Harwich - Hook of Holland ferry route was in danger of being suspended, would you say that the UK government should just do nothing, because it is run by a Swedish company?

If it was felt to be necessary to maintain it (which is to me questionable), then they should either take a stake as above or put operation out for tender, not bail a foreign-owned company out.

As with benefits, to benefit from the UK taxpayer's money you need to be paying UK tax.

 

[43096]

As with benefits, to benefit from the UK taxpayer's money you need to be paying UK tax.

Isn't Eurostar a UK registered company? So is presumably paying tax to the UK government?

 

[LNW-GW Joint]

Outside of the South East, it is almost always quicker and cheaper to fly than use Eurostar. That in itself is a strong reason not to bail it out.
if it truly is considered a profitable enterprise long term, then it will save millions of pounds of public money to just let it go into liquidation and leave someone to buy the assets.

Maybe we should do that to the rest of the UK rail network then, where it's usually faster and cheaper by car/air?

 

[EnriqueEspaña]

Quebecer pensioners to be exact, which makes them French-like, which means that Eurostar is 85% French.

Are you saying the Belgians aren't french-like?! Id say 90%. The important statistic is its 100% outside Yorkshire, I can't see why anyone would even want to visit any of the destinations they serve. They wouldn't be in this mess if they served proper destinations, like Leeds, Bradford and Barnsley, the real three capitals!

 

[BahrainLad]

It would be interesting to see what happens to the brand if it were to collapse. When Swissair went bankrupt in 2001, the solution was to have Crossair (the regional subsidiary) absorb the fleet, routes and staff with the whole outfit rebranded as "SWISS - Swiss Air Lines." Almost immediately it was pointed out to the branding agency that painting "Swiss Air Lines" on all the planes would *not* be a good idea, as this could lead creditors to demand repayment of their "Swissair" debts from the company. So, "International" was added to the name and the "Swissair" brand has remained in the deep freeze ever since.

So Eurostar II might be called Thalys...or even InOui.

 

[Alfonso]

I like Mark Smith of Seat61s idea...lend money against the 373s...either the French will flinch, or there's a train fleet for a competitor to start services available.

 

[Starmill]

Didn't Eurostar take advantage of the Coronavirus Corporate Financing Facility? This is how many airlines secured suitable credit.

I like Mark Smith of Seat61s idea...lend money against the 373s...either the French will flinch, or there's a train fleet for a competitor to start services available.

Indeed, although I've seen it reported elsewhere that their trains are now all spoken for as collateral on borrowing. Some were owned by SNCF.

Are you saying the Belgians aren't french-like?! Id say 90%. The important statistic is its 100% outside Yorkshire, I can't see why anyone would even want to visit any of the destinations they serve. They wouldn't be in this mess if they served proper destinations, like Leeds, Bradford and Barnsley, the real three capitals!

Aside the joke, I'm totally confused as to how being francophone is relevant here.

Isn't Eurostar a UK registered company? So is presumably paying tax to the UK government?

Eurostar International Limited is indeed registered with Companies House.

The Telegraph reported Sunday night that the UK Government are on the hook for a large bill if Eurostar does collapse [paywalled].

UK faces £80m bill for Eurostar collapse

Taxpayers on the hook under legal agreement if UK Government refuses to join international bailout of operator

www.telegraph.co.uk

The current legal arrangement allows for a shortfall of up to £10m to be transferred to operator Southeastern every six months between now and 2025. This means the Exchequer could be on the hook for £80m of costs if a rescue deal cannot be agreed.

 

[Qwerty133]

The relevance isn't that the ownership is French but rather the ownership is a government with sufficient access to funds to bail it out themselves. If the French would like to maintain their investment in Eurostar they could put the funds in themselves, otherwise the UK government should only be considering the most financially advantageous option of allowing them to go bust and allowing a private sector company to purchase the assets (a short gap in service whilst the formalities go through would be no big deal given the current situation).

 

[TUC]

As I said before, ownership is utterly irrelevant here. Eurostar is even only 55% French. 30% of it is owned by Canadian Pensioners.
Does that mean the bailout should come from Canda? Of course not. This has nothing to do with whether a busines "deserves" to be bailed out, or who will benefit financially from it. It's about maintaining a necessary transport link. It's not some kind of insurance policy that only pays out if you paid enough in.

It just makes no sense at all. If the Harwich - Hook of Holland ferry route was in danger of being suspended, would you say that the UK government should just do nothing, because it is run by a Swedish company?

In a passenger rsther than frieght sense (given that the comparison is with Eurostar as a passenger operstor), no, why would the government want to support Harwich-Hook of Holland? In the same way as Eurostar, there's plenty of other ways to get to the Netherlands than one ferry route in one corner of England.

 

[EnriqueEspaña]

Aside the joke, I'm totally confused as to how being francophone is relevant here.

Ah, but you cant put aside the joke, as it is entirely the point! Its not relevant amd that is what we were joking about!

 

[dgl]

See I think if you book in advance (like you would to get a cheap airline deal) Eurostar are actually very good value, even more so if you add the fact that you can take your own food/drink and there are essentially no baggage charges, plus it seems to be a much nicer atmosphere than a plane (although in my life I have only been on one return plane journey to Venice).
I know when we went to Paris in 2015 it was less than £60 per person both ways, not exactly what I would call expensive.

Of course the environmental factors should also be seen as a real benefit, especially in France where most of the power is from clean energy (of which is mainly nuclear).