Tunnel vision of better days as Eurostar numbers rise

Published on Thursday 15 October 2009 21:47

DISCOUNTED tickets have helped Eurostar to post a rise in passenger numbers over the summer as holidaymakers escaped to the Continent.

The firm said passenger volumes of 2.6 million between July and September were 8 per cent ahead of 2008 – although the Channel Tunnel fire last year also depressed trading.

Despite the strength of the euro against the pound, the 11 per cent growth in outbound passengers outstripped a 7 per cent increase in travellers inbound from Europe.

Eurostar said UK travellers were taking advantage of its 59 return deal as growing numbers of leisure travellers offset much tougher business markets.

While the group's overall passenger volumes for the nine months of the year so far are 0.9 per cent down at 6.9 million, the firm said revenues were almost 7 per cent ahead of the previous year in the third quarter.

The company, which celebrates its 15th anniversary next month, has carried 100 million passengers since it began trading in 1994. Up to 19 services a day are run to Paris, while up to ten trains travel to Brussels.

Eurostar hailed the success of its "Little Break, Big Difference" campaign for the upturn in leisure travel, as it saw signs of life in the business market.

Chief executive Richard Brown said: "In recent weeks, a number of our major corporate clients have eased their business travel restrictions. Although it is early days, this may be a sign of an upturn."

Next year, Eurostar will lose its exclusive right to run passenger services through the tunnel, opening up the firm to competition from rival operators.

Eurostar is a joint venture owned by the UK's London & Continental Railways, France's SNCF and Belgium's SNCB. The company is the biggest customer of Eurotunnel, which operates the Channel Tunnel and runs vehicle shuttle services.

Eurotunnel, which holds the concession for operating the Channel Tunnel until 2086, is due to post its third-quarter revenue and traffic figures on Tuesday. Last year, the company, which is listed on the Paris stock exchange, turned over 748 million (685m), returning a profit of 40m and recommending its first dividend, at 0.04.

Since the tunnel opened in 1994, more than 230 million passengers and 215 million tonnes of freight have passed under the Straits of Dover.

Construction of the rail link began in 1987, with tunnelling commencing the following year. At 1985 prices, the Channel Tunnel cost just under 4.7 billion to build, 80 per cent more than originally planned and about 10bn in today's prices. The debt from the project crippled Eurotunnel until refinancing was secured.

Earlier this week, Prime Minister Gordon Brown outlined plans to sell High Speed 1, the line between London's St Pancras station and the Channel Tunnel.

Transport experts have valued the line at 4bn, but analysts have expressed doubts over the UK government's ability to find a buyer in the current market.