EUROPE: Cross-Channel high speed train operator Eurostar has called for financial support of the kind which has been offered to airlines during the coronavirus pandemic, saying that without government funding ‘there is a real risk to the survival of Eurostar and the green gateway to Europe’.
Eurostar’s comments came in response to a letter which business campaign group London First leaders sent to the UK government on January 17 calling for ‘swift action’ to safeguard the operator’s future.
Eurostar’s ridership is down by 95% as a result of the pandemic, and it is currently operating just one train each way per day on the routes from London to Paris and Amsterdam. While the operator has cut services and furloughed staff, it faces uncertainty about the longer-term impact of future travel restrictions and regulations, which are beyond a train operator’s control.
London First said that on a pre-lockdown trajectory Eurostar would run out of funds in the coming months. It believed that the UK’s latest lockdown measures, coupled with the emergence of a faster-spreading variant of the coronavirus, meant that international passenger numbers were likely to remain low into the spring.
Eurostar is owned by French national railway SNCF (55%), Belgium’s SNCB (5%) and a consortium of Caisse de Depot et Placement du Quebec and Hermes Infrastructure which acquired the UK government’s 40% stake in 2015. As such, it is not eligible for the support which the UK government has provided to its franchised passenger train operators.
Eurostar said ‘we are encouraged by the government-backed loans that have been awarded to airlines and would once again ask that this kind of support be extended to international high speed rail which has been severely impacted by the pandemic.’
Last month Railway Gazette International’s sister publication Flight Global published a review of the support which European governments have provided for airlines during the pandemic. This said the UK government had stopped short of providing direct bailouts for airlines, but had initiated general business support measures including the Coronavirus Corporate Finance Facility which British Airways, EasyJet, Ryanair and Wizz Air had used to raise liquidity.
Falling between the cracks of support
London First said it was not seeking special treatment for Eurostar, but for ‘equal access to financial support as companies in similar positions’, including ‘at the very least’ business rates relief and access to government loans.
‘If this viable business is allowed to fall between the cracks of support — neither an airline, nor a domestic railway — our recovery could be damaged’, said London First. It noted that almost four out of five passengers travelling between London and Paris or Brussels used Eurostar, which employs 1 200 people in the UK, supports a further 1 500 jobs in the direct supply chain, and offers significant environmental benefits over air travel.
Signatories to the letter included Turner & Townsend CEO Vincent Clancy; HS1 CEO Dyan Crowther; Keltbray CEO Darren James; Siemens Mobility Ltd CEO William Wilson; Mark Naysmith, CEO UK MEIA at WSP; and Colin Wood, CEO Europe at AECOM.
Commenting on the appeal for government support, Labour’s 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’.
He called for ‘a comprehensive strategy for our regional, national and international railways’, which would go beyond the current franchise support programme to include Eurostar and open access operators.
The RMT trade union called for ‘urgent, decisive and co-ordinated action to prevent the collapse of the vital Eurostar link’.
‘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’, said General Secretary Mick Cash. ‘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.’
Cash also called for action to support the open access operators, warning ‘we will need all our domestic and continental rail operations to be fighting fit to help kick-start the economic recovery when we emerge frothis current lockdown’.