Who takes Eurostar? Almost no one, because the pandemic fuels a railway crisis

PARIS – Earlier this month, David-Alexander Leduc rolled his suitcase on an almost empty platform at Gare du Nord station and scanned his turnstile ticket to board the only Eurostar to leave for London that day.

Mr Leduc used to commute regularly on business on one of at least 17 Eurostar high-speed trains which ran back and forth daily, from morning to evening, through the underwater tunnel connecting Great Britain to France.

He was lucky to catch a train.

“It’s compelling,” said Mr Leduc, who lives in London and has reduced jumps in France to meet customers, while a dive in national quarantines forces Eurostar to reduce services. “But you have to adapt.”

On Monday, a bad year for Eurostar suddenly worsened. All services from London to Paris, Brussels and Amsterdam have been suspended for at least 48 hours, as governments on the mainland have banned travel from the UK as a precaution, as health officials are trying to control a new option. of coronavirus that crosses parts of England. Trains will continue to operate from Paris to London, the company said.

Eurostar, the elegant and fast way to travel that connects London, Paris, Brussels, Amsterdam and other cities, is a shadow of itself, paralyzed by the pandemic. His leadership has disappeared, but his finances are under threat. More than 90% of its employees were followed, said one of its unions.

Its plight reflects a struggle for survival that is taking place throughout the European train industry, as the pandemic continues to overturn transport. Like European airlines, the railway sector is facing the worst crisis in modern history.

Ridership has fallen from 70% to 90% amid blockages and social distancing requirements, pushing the industry to a staggering loss of € 22 billion this year, roughly the same as expected for European airlines, according to CER, a Brussels-based trading group passengers and freight train operators. Thousands of trains have been blocked and tens of thousands of workers are on government-subsidized roads.

“It’s a totally extraordinary situation,” said Libor Lochman, CER’s executive director. “There is no comparison for this and it may and will lead to the bankruptcy of several companies, unless there is the political will to prevent it,” he said.

With more than nine billion passengers and 1.6 billion tonnes of goods carried on rails from Spain to Sweden, European trains are as vital as planes for transporting people and goods on the continent.

But even after the pandemic, analysts say home practices, online socializing and increased online shopping will have a lasting impact on rail travel of all kinds, leaving private companies such as Eurostar and state railways, including DeutscheBahn in Germany and France’s SNCF, Eurostar’s largest shareholder, struggling to survive.

The European Union needs the industry to remain viable: it has made rail transport a central part of the European Green Agreement, an important environmental policy that aims to make Europe the first climate-neutral continent by 2050. The plan includes doubling roads. high-speed rail and freight traffic and the expansion of trains and power lines to reduce carbon emissions.

Eurostar, which has 3,000 employees and is headquartered in London, has appealed to the British and French governments, citing its role as a low-carbon mode of travel, after the aviation industry and public rail transport received billions of euros. in financial support.

“There is a risk that this iconic service will be allowed to fail,” Eurostar CEO Jacques Damas wrote in a published article.

As an independent train operator, the company is not eligible for direct aid in the UK, but is pressing on other fronts. Eurostar is seeking an exemption from British taxes and, in particular, from the steep taxes it pays for the use of train tracks in the UK, which Mr Lochman said can sometimes cost several hundred euros per mile.

State railways receive billions of support. SNCF, which is facing losses of up to 5 billion euros, with only a fraction of its high-speed TGV trains currently running, received a 4 billion euro capital injection from the French government last Tuesday. DeutscheBahn’s projected losses of 5.6 billion euros this year will be offset by up to 4 billion euros in rail support from the German government.

Private equity operators that rely on shareholders and customer revenues face greater obstacles. Low-cost train companies, including Flixtrain in Germany, have reduced services and have financial problems. Leo Express, a competitor in the Czech Republic, went bankrupt in October.

Eurostar is the largest and best known group. Owned by a consortium that includes SNCF, which holds a 55% stake, as well as investment firms and the Belgian National Railway Company, it was already preparing for a potential impact on business in the UK’s decision to leave the European Union. , which officially enters into force on 1 January.

The pandemic restrictions took a quick hit. After a record profit in 2019, when 11 million people crowded into its trains, Eurostar said it was now “fighting for its survival” after a “total collapse in demand” for international rail travel.

The number of passengers has fallen by 95% since March. Revenue fell by EUR 340 million in the first half of the year, down 61% from last year. From the peak of more than 60 trains a day, Eurostar has reduced the service to a daily round trip between London and Paris and one on its London-Brussels and Amsterdam routes.

Until this week, Eurostar was temporarily adding several daily trains before the Christmas holidays, with the intention of returning to a reduced schedule in January.

The suspension of the London service will depend on whether European governments agree to accept British travel. “We are expecting more details from governments regarding restrictions exceeding this initial 48-hour period,” the company said on Monday.

Eurostar has recently obtained over 200 million British pounds in funding from its shareholders, but the money is limited. A spokeswoman said the outlook for 2021 “continues to be significantly lower for passengers and loss of revenue than our business can sustain”.

Trade unions, which routinely struggle with management, are aligned with Eurostar directors to ask for government help.

“By the time Covid broke out, we had a growing business,” said Mick Lynch, a representative of the National Union of Railway, Maritime and Transport Workers, representing Eurostar employees in the UK. “Now, we look at 5% of previous arrivals and passengers on a good day,” he said. “No business can operate in this regard,” he said.

Even after the launch of a vaccine, major European railway companies are facing a precarious transition period. A complete change for passenger rail operators is unlikely before 2023 or 2024, and even that will depend on government support, said Maria Leenen, founder of SCI Verkehr, a Hamburg railway industry consulting firm.

As the industry anticipates a post-pandemic recovery, analysts say it will need to inspire a new loyalty for riders, in part by promoting trains as an environmentally friendly way to travel as Europe moves towards a greener future.

Companies are also reviewing price patterns that worked well when business executives and selfie tourists rushed to European capitals, but are less viable as a pandemic-induced recession reduces consumer spending power. .

With fewer trains, ticket prices have risen to sometimes astronomical levels, sending even environmentally conscious commuters looking for flights up to 75% cheaper.

Mr. Leduc, an industrial consultant for British and French start-ups, paid about 400 euros (about $ 485) for his round-trip ticket, about double the normal fare. He said he paid for it because the trip was for business. But as he plans to travel on holiday to France with his wife and daughter, he is considering whether to take easyJet, a discount airline, after realizing that train tickets for his family could cost nearly $ 1,000. euro.

“If Eurostar prices remain in the stratosphere, I will not hesitate to start taking the plane, even if it is more tiring, longer and more polluting,” he said.

Even when quarantines are high, people may not use the trains as often, including profitable business travelers who have not thought of anything to jump on the Eurostar to Paris for a meeting, then return to take dinner in Soho that night. Some riders will have abandoned the car train. In metropolitan areas, commuters can increasingly turn to bicycles for short-distance travel.

However, the pandemic is unlikely to destroy Europe’s love affair with trains. People will likely gravitate to their old mobility behavior as the pandemic fades, said Ms Leenen from SCI Verkehr.

“But the trains will be a little less crowded,” she said.

Antonella Francini contributed to the Paris report.