Expect ‘arm-wrestling’ between London and Paris to rescue Eurostar, says top economist

Eurostar will be the subject of financial “arm-wrestling between the UK and France”, a top French transport economist has said. But Professor Yves Crozet of the University of Lyon predicted the rail firm will survive.

In a normal year, Eurostar would be expected to carry more than 30,000 passengers a day on average; sell tickets worth £1bn annually; and make around £100m in profit.

But trains through the Channel Tunnel from London have been reduced to a single trip to Paris and another to Brussels and Amsterdam, with a typical daily total of 200 to 300 travellers.

Passenger numbers have reduced to a trickle because of the coronavirus pandemic and consequent government restrictions.

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With revenue close to zero but a significant cost base, Eurostar is “haemorrhaging cash” according to one rail insider.

In November, Eurostar’s chief executive, Jacques Damas, wrote to the chancellor, Rishi Sunak, asking for financial support.

On Monday British business leaders called for a UK government rescue of the cross-Channel train company.

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Eurostar, which is 55 per cent owned by SNCF, the giant state-owned French rail firm, has not benefited from the £10bn rescue package for UK train operators.

Jean-Pierre Farandou, the chief executive of SNCF, said on Tuesday: “The situation is very critical for Eurostar.”

Professor Crozet was invited to speak to MPs on the Transport Select Committee.

The chair, Huw Merriman, asked: “Can you give us the view from France: is it just the feeling that because Eurostar is 55 per cent owned, indirectly, by the French government, the French government will stand by?

“Or are we being too laid back in the UK and we need to give some financial support from London?”

Professor Crozet said: “If you want to keep Eurostar, you have to give a lot of public subsidies. It is the same consequence that we have after a war.

“We will have probably arm-wrestling between the UK and France about that.

“Clearly it is not possible to stop Eurostar. We need Eurostar.”

A spokesperson for Eurostar said: “With passenger numbers down dramatically versus this time last year the situation remains critical.

“We are working hard to protect the future of our high-speed rail link between the UK and mainland Europe and will continue to work constructively with governments on both sides of the Channel.”

A Department for Transport spokesperson said: “We recognise the significant financial challenges facing Eurostar as a result of Covid-19 and the unprecedented circumstances currently faced by the international travel industry.

“The government has been engaging extensively with Eurostar on a regular basis since the beginning of the outbreak. We will continue to work closely with them as we support the safe restart and recovery of international travel.”

Eurostar has long warned that Brexit will also damage its business, with “no benefits or growth opportunities that we could identify from leaving the EU”.

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