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

[johncrossley]

I agree, which is why Eurostar may not survive.

It is NOT of strategic importance to the UK, particularly post Brexit. If Eurostar failed, it is brave (in the Yes, Minister sense) to assume that the UK Government would set up a replacement.

It is sobering to note the diminution/extinction of cross-border rail services elsewhere in Europe, particularly where states have fragmented, e.g. in the former USSR and Yugoslavia, and there is less need to travel across the newly created borders.

How much do you think the demand for travel between London and Paris will decline in the long term?

 

[Hey 3]

How much do you think the demand for travel between London and Paris will decline in the long term?

Just note that Eurostar has(pre-COVID) got 70% of the London-Paris market, so it will not decline too much if it declines.

 

[deltic]

How much do you think the demand for travel between London and Paris will decline in the long term?

By zero- it will probably continue to grow albeit at a slower rate than before.

In contrast we may probably see a decline in low cost airline flights to some of the more remote French airports as the growth in Brits buying rural retreats collapses.

 

[johncrossley]

By zero- it will probably continue to grow albeit at a slower rate than before.

So why would Eurostar be less important to keep going than before? That casts doubt on what @daodao said.

 

[daodao]

So why would Eurostar be less important to keep going than before? That casts doubt on what @daodao said.

While there is no specific evidence regards London-Paris journeys, erection of hard borders generally reduces travel across them. For London-Brussels journeys, I would anticipate a significant reduction in travel of the order of 50% as much of the travel pre-Brexit was likely to have been connected to the administrative importance of Brussels as the EU capital.

 

[johncrossley]

While there is no specific evidence regards London-Paris journeys, erection of hard borders generally reduces travel across them. For London-Brussels journeys, I would anticipate a significant reduction in travel of the order of 50% as much of the travel pre-Brexit was likely to have been connected to the administrative importance of Brussels as the EU capital.

Brussels was always the poor relation when it came to Eurostar and now there are direct services to Rotterdam and Amsterdam. There is still a comprehensive trade and co-operation agreement between the UK and the EU so ties between the UK and EU are still very strong. Of course there is scope for even closer ties in the future.

 

[LeeLivery]

There will still be significant numbers of officials travelling between the two, not forgetting as there's now an EU-UK "Partnership Council". Plus EU, UK and Belgian diplomats & staff will be travelling and there's NATO and Eurocontrol. Also, many NGOs have a London and Brussels office. I don't think the reduction will be anywhere near 50%.

 

[Ianno87]

I agree, which is why Eurostar may not survive.

It is NOT of strategic importance to the UK, particularly post Brexit. If Eurostar failed, it is brave (in the Yes, Minister sense) to assume that the UK Government would set up a replacement.

We've been through this. It is very much of strategic importance. No matter how much you protest otherwise / don't care because it doesn't personally benefit you.

It is sobering to note the diminution/extinction of cross-border rail services elsewhere in Europe, particularly where states have fragmented, e.g. in the former USSR and Yugoslavia, and there is less need to travel across the newly created borders.

Sobering. But inaccurate to the UK/EU example, given the relatively close alignment we still have between us.

 

[deltic]

While there is no specific evidence regards London-Paris journeys, erection of hard borders generally reduces travel across them. For London-Brussels journeys, I would anticipate a significant reduction in travel of the order of 50% as much of the travel pre-Brexit was likely to have been connected to the administrative importance of Brussels as the EU capital.

Most trips are not business related and of those that are only a small proportion to Brussels will be related to the EU. Given we will now spend years in permanent negotiation with the EU there will probably be little reduction in those that are. There is not what I would call a hard border between the UK and the continent - it is certainly not as soft as it was but after the early hiccups are ironed out trade will probably be back to pre-covid levels in a couple of years.

I agree however with your comment that Eurostar is not of strategic importance to the UK - it handled around 11m passengers in 2019, less than the number who flew in that year from the UK to France and Belgium

 

[Peterthegreat]

I agree however with your comment that Eurostar is not of strategic importance to the UK - it handled around 11m passengers in 2019, less than the number who flew in that year from the UK to France and Belgium

A rather spurious argument. As more passengers fly and drive between England and Scotland than take the train you can argue there is no strategic reason to retain a railway passenger service over the border.

 

[deltic]

A rather spurious argument. As more passengers fly and drive between England and Scotland than take the train you can argue there is no strategic reason to retain a railway passenger service over the border.

There isnt, the impact of closing the rail links between England and Scotland would have minimal impact on the UK's economy or its defense. You need to define what you mean by strategic.

 

[Peterthegreat]

There isnt, the impact of closing the rail links between England and Scotland would have minimal impact on the UK's economy or its defense. You need to define what you mean by strategic.

In that case you may as well close the whole of the UK rail network down.

 

[SamYeager]

Whilst the tunnel and the freight traffic that comes through it may be of strategic importance to the UK I'm certainly not convinced that the passenger traffic through the tunnel is of strategic importance to the UK. I feel some people may be getting the two mixed up.

 

[Peterthegreat]

Whilst the tunnel and the freight traffic that comes through it may be of strategic importance to the UK I'm certainly not convinced that the passenger traffic through the tunnel is of strategic importance to the UK. I feel some people may be getting the two mixed up.

I can assure you I am not! If you want an alternative to flying then a passenger link to the continent is of strategic importance.

 

[Hey 3]

Why are some of the members(@daodao and @deltic) thinking Eurostar is of no strategic importance? Because there have been plans for competition and expansion and also Eurostar has(pre-covid) 70% of the London-Paris market, and they also have a fair share of the Amsterdam, Brussels, the winter Alps ski trains, Lyon and Marseille. And it is the Only (bar possibly the ferry) carbon neutral link from England and Grrat Britain to Continental Europe, which in a climate emergency makes it even more strategic.

 

[Peterthegreat]

Why are some of the members(@daodao and @deltic) thinking Eurostar is of no strategic importance? Because there have been plans for competition and expansion and also Eurostar has(pre-covid) 70% of the London-Paris market, and they also have a fair share of the Amsterdam, Brussels, the winter Alps ski trains, Lyon and Marseille. And it is the Only (bar possibly the ferry) carbon neutral link from England and Grrat Britain to Continental Europe, which in a climate emergency makes it even more strategic.

Exactly!

 

[deltic]

Why are some of the members(@daodao and @deltic) thinking Eurostar is of no strategic importance? Because there have been plans for competition and expansion and also Eurostar has(pre-covid) 70% of the London-Paris market, and they also have a fair share of the Amsterdam, Brussels, the winter Alps ski trains, Lyon and Marseille. And it is the Only (bar possibly the ferry) carbon neutral link from England and Grrat Britain to Continental Europe, which in a climate emergency makes it even more strategic.

No one has defined what they mean by strategic, strategic for government relates to issues such as the impact on the economy and defense. The Channel Tunnel is strategic infrastructure given the volume of freight moving through it but the UK would not be greatly impacted by the loss of European passenger rail services and hence why the government is not particularly interested in supporting it. I personally would want the service to be retained but that is not how government works.

 

[JamesT]

Why are some of the members(@daodao and @deltic) thinking Eurostar is of no strategic importance? Because there have been plans for competition and expansion and also Eurostar has(pre-covid) 70% of the London-Paris market, and they also have a fair share of the Amsterdam, Brussels, the winter Alps ski trains, Lyon and Marseille. And it is the Only (bar possibly the ferry) carbon neutral link from England and Grrat Britain to Continental Europe, which in a climate emergency makes it even more strategic.

Because it's a relatively small part of travel between the UK and elsewhere and would be relatively easy to replace.

Eurostar carried 11m passengers in 2018. UK Border Force statistics say there were 145 million passenger arrivals in the UK in 2019. As many of the Eurostar passengers will have done a return trip, as a percentage of journeys it's fairly small. Airlines could increase their number of flights to absorb those journeys when things return to normal.

Also, because of the geography of the UK, it's irrelevant for much of the UK. Most people not in the South-East aren't going to consider going via London to get to Europe, they'll go direct. Mostly this will be flights but possibly also ferries across the North Sea for those near the ports in the North-East.

As @deltic says, a strategic link would be one where it causes massive dislocation if it's closed. We've seen from the cross-Channel issues in January that freight is strategic, but there's no evidence that any particular passenger service has that status.

 

[DavidCarbonis]

Because it's a relatively small part of travel between the UK and elsewhere and would be relatively easy to replace.

Eurostar carried 11m passengers in 2018. UK Border Force statistics say there were 145 million passenger arrivals in the UK in 2019. As many of the Eurostar passengers will have done a return trip, as a percentage of journeys it's fairly small. Airlines could increase their number of flights to absorb those journeys when things return to normal.

Also, because of the geography of the UK, it's irrelevant for much of the UK. Most people not in the South-East aren't going to consider going via London to get to Europe, they'll go direct. Mostly this will be flights but possibly also ferries across the North Sea for those near the ports in the North-East.

As @deltic says, a strategic link would be one where it causes massive dislocation if it's closed. We've seen from the cross-Channel issues in January that freight is strategic, but there's no evidence that any particular passenger service has that status.

And some parts of the East Midlands too! Just as quick (and easy) for those of us based there (or at least formerly) to get to the centre Brussels or Paris via rail compared to some local airports in the region!

 

[JamesT]

If you cast your mind back to the various occasions that Eurostar services have been suspended (often due to bad weather), this hasn't caused a major dislocation in the UK economy. People either postponed their travel or found a different method. Whereas the tunnel is a strategic link for freight, lorries not being able to get across caused disruption to the UK economy as there isn't an easy substitute.

 

[RT4038]

If you cast your mind back to the various occasions that Eurostar services have been suspended (often due to bad weather), this hasn't caused a major dislocation in the UK economy. People either postponed their travel or found a different method. Whereas the tunnel is a strategic link for freight, lorries not being able to get across caused disruption to the UK economy as there isn't an easy substitute.

I think it rather depends on your definition of strategic.

On your arguments the passenger train service on the section of railway line from Peterborough to London (or any other piece of railway) is not strategic - it is irrelevant to most people in the country (i.e. never or rarely travel on it) and those who do travel on it would find an alternative routeing or means of travel quite easily. Therefore it is not strategic and should not be supported if in difficulty. Not sure this is quite right?

 

[johncrossley]

In the event of a pause or cessation of Eurostar service, presumably there would be some demand for a shuttle coach service between Ashford and Calais to maintain connectivity with regular TGV services between Calais and Paris and between Calais and Brussels. Eurostar is often too expensive for travellers who need to travel at short notice so a rail-coach-rail service might be more affordable. Obviously people who can afford it would switch to planes. This is basically how things worked before the Channel Tunnel opened.

 

[zwk500]

If you cast your mind back to the various occasions that Eurostar services have been suspended (often due to bad weather), this hasn't caused a major dislocation in the UK economy. People either postponed their travel or found a different method.

Disruption to E* has rarely lasted more than a couple of days. Totally different situation to a permanent cessation of services.

In the event of a pause or cessation of Eurostar service, presumably there would be some demand for a shuttle coach service between Ashford and Calais to maintain connectivity with regular TGV services between Calais and Paris and between Calais and Brussels. Eurostar is often too expensive for travellers who need to travel at short notice so a rail-coach-rail service might be more affordable. Obviously people who can afford it would switch to planes. This is basically how things worked before the Channel Tunnel opened.

A coach shuttle is unlikely to compete effectively with a budget airline, tbh. A London-Paris coach throughout might be cheap enough to do so.

 

[Taunton]

I can assure you I am not! If you want an alternative to flying then a passenger link to the continent is of strategic importance.

How can it be both "strategic", but an "alternative to flying" at the same time?

Probably 95%+ of the passenger traffic between the UK and mainland Europe in normal times is by air. These people do not want an alternative to flying, nor would they care for self-appointed railway wonks telling them they must do so. When Eurostar moved from Waterloo to St Pancras the air service from Heathrow to Paris notably picked up, as passengers from Surrey etc who had previously found the direct transfer at Waterloo worked well now found things less so. It must have been pretty marginal between modes for them to make the move.

 

[Hey 3]

How can it be both "strategic", but an "alternative to flying" at the same time?

Probably 95%+ of the passenger traffic between the UK and mainland Europe in normal times is by air. These people do not want an alternative to flying, nor would they care for self-appointed railway wonks telling them they must do so. When Eurostar moved from Waterloo to St Pancras the air service from Heathrow to Paris notably picked up, as passengers from Surrey etc who had previously found the direct transfer at Waterloo worked well now found things less so. It must have been pretty marginal between modes for them to make the move.

It can be both, it is not hard to figure out how it is both with those reasons mentioned upthread

 

[LNW-GW Joint]

I go back to the original UK/FR treaty for Channel Tunnel operation.
Both sides agreed that rail (as opposed to ET's shuttles) would take 50% of tunnel capacity.
It underwrote the funding/construction of Eurotunnel, and Eurostar has been a key part of that.
The commercial failure of Eurostar would not eliminate the UK commitment to provide rail services through the tunnel.

All ferry and airline links to the continent are on a commercial basis, they are no more "strategic" than rail.
Airline and ferry operators go bust all the time, and the industry adjusts accordingly.
Eurostar is no different (as far as governments and regulators are concerned), and the infrastructure will continue in use, perhaps with new owners.

 

[Gloster]

The commercial failure of Eurostar would not eliminate the UK commitment to provide rail services through the tunnel.

All very true, but we seem to have a government that appears to want to distance itself from Europe or have the relationship entirely on its own terms with no thought to the effect this could have in the long term. It also appears to be willing to ignore treaties that it doesn’t like; it may not have done so yet, but that such ideas are even put forward is a sign of the way things have changed. Leaving Eurostar to sort its problems out itself may not happen, but a few years ago it wouldn’t even be thought of as possible: now it is, even if unlikely.

 

[Nicholas Lewis]

DT running a story behind a paywall unfortunately but essence is the loans (£400m) have been refinanced so that removes threat of lender putting the business into administration so should give the Dept of T the ability to provide export finance

https://www.telegraph.co.uk/busines...ender-lifeline-shareholders-prepare-do-heavy/

One option could be for the UK to provide export guarantees similar to those provided to the likes of British Airways, Rolls-Royce and easyJet since the pandemic hit.

Eurostar made no comment according to article.

Have to see how things play out

 

[LNW-GW Joint]

I can't remember if it has been mentioned previously, but the Greenspeed merger of Thalys and Eurostar has been but on ice (essentially by SNCF).
That is until both operators can secure a route back to profitabilty.
Thalys is also in financial trouble, but not to the same extent as Eurostar, as services have been closer to normal through the pandemic.
Covered in Modern Railways (May) by Keith Fender.

 

[MotCO]

DT running a story behind a paywall unfortunately but essence is the loans (£400m) have been refinanced so that removes threat of lender putting the business into administration so should give the Dept of T the ability to provide export finance

https://www.telegraph.co.uk/busines...ender-lifeline-shareholders-prepare-do-heavy/


Eurostar made no comment according to article.

Have to see how things play out

Full Daily Telegraph article:

"Eurostar has struck a deal with its lenders to refinance hundreds of millions of pounds of debts, paving the way to re-open talks with ministers over financial support from British taxpayers.
A group of banks, including state-backed NatWest, have agreed to refinance £400m of loans that were due to be repaid this summer.
City sources said that Eurostar shareholders are prepared to do “heavy lifting” by injecting fresh capital into the business, but are hopeful of accessing state aid as part of a plan to preserve the operator’s long-term future.
UK support would be made on the basis that if Eurostar collapsed, Britain could left without a rail link under the English Channel for up to two years, insiders added.
Grant Shapps, Transport Secretary, has previously resisted calls to inject taxpayer cash to save the firm. Eurostar “is not our company to rescue” he said in February.

It is understood that Eurostar’s shareholders were told by government officials to first refinance its debts before they would entertain the idea of offering financial support."

One option could be for the UK to provide export guarantees similar to those provided to the likes of British Airways, Rolls-Royce and easyJet since the pandemic hit.
“Shareholders accept that they are going to have to do the heavy-lifting,” said one deal insider.
“I think it’s accepted that if one operator ceased to operate, that it could easily take 18 months to two years to transfer to another.”
David Cameron sold the UK’s stake in 2015 for £750m.
The rail operator is now majority-owned by French rail firm SNCF alongside two pension funds.
Eurostar appealed to the Government for a bailout in January after a 95pc slump in passenger numbers during the pandemic left the business “fighting for survival”
Eurostar declined to comment.