• eurostar service 10 years old

  • Discussion about railroad topics everywhere outside of North America.
Discussion about railroad topics everywhere outside of North America.

Moderators: Komachi, David Benton

  by Guest
 
David Benton wrote:http://news.bbc.co.uk/2/hi/business/4010527.stm

the eurostar high speed service is 10 years old . profitability seems a little way off. I'm not sure if these trains recieve any govt subsidy .
There is no subsidy as such. However, the company owning the Channel Tunnel Rail Link has received indirect aid because the CTRL will also be used for domestic routes for Kent commuters to London.
  by george matthews
 
David Benton wrote:http://news.bbc.co.uk/2/hi/business/4010527.stm

the eurostar high speed service is 10 years old. profitability seems a little way off.
I'm not sure if these trains recieve any govt subsidy .
There is no subsidy as such. However, the company owning the Channel Tunnel Rail Link has received indirect aid because the CTRL will also be used for domestic routes for Kent commuters to London.

  by David Benton
 
seems like a pretty tough route to try and make a profit on then .
Was the eurostar company originally govt owned , or assissted ?

  by george matthews
 
David Benton wrote:seems like a pretty tough route to try and make a profit on then .
Was the eurostar company originally govt owned , or assissted ?
The Treaty of Canterbury forbids government assistance. That was the influence of the mad woman. However the main problem, as with the Tunnel, is that passenger numbers have not yet reached those predicted ten years ago. But Eurostar has already driven some airlines out of business. Only recently British Airways (which may have a financial interest in Eurostar) cancelled all (6 per day) its flights from Gatwick to Paris. When the second phase of the CTRL opens, to St Pancras, passenger numbers should increase again as the route becomes even more competitive. The opening of the first phase had a useful effect. But the cheap airlines are driving down fares. They don't pay for their effects on the atmosphere, nor for the noise they inflict on those below. A carbon tax on airline fuel would increase the attractiveness of Eurostar.

I don't think the management are good at selling tickets to other destinations - though this has improved somewhat recently.

  by Sir Ray
 
The article states EuroStar claims the Tunnel Fees are killing it (60% of Sales Revenue - that's a helluva lot).
Hmmm, kinda reminscent of the Central of New Jersey and ultrahigh New Jersey property taxes - in the end, the taxes were reformed but it was too late for the CNJ - hopefully the fee structure can be reformed before it's too late for the Eurostar.

Are Channel Ferrys and Hydrofoils (if any still run) still trying to compete - I read years ago they were slashing fares, but not sure how that all turned out>

  by george matthews
 
Sir Ray wrote:The article states EuroStar claims the Tunnel Fees are killing it (60% of Sales Revenue - that's a helluva lot).
Hmmm, kinda reminscent of the Central of New Jersey and ultrahigh New Jersey property taxes - in the end, the taxes were reformed but it was too late for the CNJ - hopefully the fee structure can be reformed before it's too late for the Eurostar.

Are Channel Ferrys and Hydrofoils (if any still run) still trying to compete - I read years ago they were slashing fares, but not sure how that all turned out>
The Eurostar company has three main owners. SNCF (France) has a large part; SNCB/NMBS (Belgium) has a smaller part. The former British Rail part is owned by a consortium of companies including British Airways and Stagecoach (I think). They have just announced that all trains will go into St Pancras after 2007 when the last section of the CTRL is finished. At that time they ought to attract more passengers coming in from the north of London. As they will then be much faster than at present they should attract most of the market. The Tunnel fees will have to be renegotiated then anyway, and should become a rate of so much per passenger. At present they pay a flat annual rate.

The price cutting on the ferries probably doesn't affect Eurostar which is not competing with car drivers but with airlines. The ferry price war does affect Eurotunnel's shuttle business. The numbers carried have been poor this year, and even more the yield. Probably the cheap airlines do affect car drivers as many people will fly and hire a car at their destination. The main business year round is carrying lorries. That business is doing well and continuing to grow, though there too the price war is affecting yield.

The financial state of Eurotunnel is a disaster. I am a shareholder and have free travel in a car (and have no car) but the shares are almost worthless. They may never pay the promised dividend. I sometimes take people through in their cars.

  by george matthews
 
Sir Ray wrote:The article states EuroStar claims the Tunnel Fees are killing it (60% of Sales Revenue - that's a helluva lot).
Hmmm, kinda reminscent of the Central of New Jersey and ultrahigh New Jersey property taxes - in the end, the taxes were reformed but it was too late for the CNJ - hopefully the fee structure can be reformed before it's too late for the Eurostar.

Are Channel Ferrys and Hydrofoils (if any still run) still trying to compete - I read years ago they were slashing fares, but not sure how that all turned out>
Here is the link to what is a lucid presentation of the problems anyone associated with the tunnel is facing.
http://news.independent.co.uk/business/ ... ory=582619
More trouble is in store with English Welsh & Scottish Railway.
"The Government currently pays EWS's tunnel tolls, totalling £26m a year. But the arrangement expires in April, and for the 19 months until Eurotunnel's minimum charge ends, EWS will be saddled with a bill that it can't afford to pay.
"This is a fragile business. We'd have to stop running through the Channel Tunnel," says Graham Smith, the planning director of EWS. "We don't want to frighten the horses, but this is the point we have made to the Department for Transport and the Strategic Rail Authority." The Government is due to decide on whether to bail EWS out by the end of the year."

  by David Benton
 
What a great paper the independant is ! .

the whole problem sems to be the sepreration of private and public interests . obviously the line and trains are in the nations interest , and in my mind this service should ne govt owned and funded.
  by David Benton
 
http://www.nzherald.co.nz/index.cfm?c_i ... D=10329487

Seems the light at the end of the tunnel , as far as profitablity , is as far away as ever . i'm glad i resisted the urge to buy shares , when i first saw the glowing plans Euro Tunnel had prior to construction .
  by george matthews
 
David Benton wrote:http://www.nzherald.co.nz/index.cfm?c_i ... D=10329487

Seems the light at the end of the tunnel , as far as profitablity , is as far away as ever . i'm glad i resisted the urge to buy shares , when i first saw the glowing plans Euro Tunnel had prior to construction .
A year ago in April 2004 a group of French shareholders, egged on by a convicted (fraud) share tipster and extreme rightwing politician Nicholas Miguet kicked out the Anglo-French Board and put in those who had promised to increase the share price and solve the problems by repudiating the debt. I voted against these but there are now few British shareholders. The Board is now wholly French and has had several comings and goings in the last year. The prsent chairman still maintains that the creditors should write off the debt. This is a silly Gallic dream. It is clear that their real intention was to apply to the French government for a subsidy, as with every large French company. But Eurotunnel is not a French company. It is bi-national and established by an International Treaty, which explicitly states that neiher government is allowed to subsidise it. The previous bi-national Board (which was highly respected and competent) was trying to get round this provision by various means, and was buying back the debt at a discount. The current all-French Board has abandoned these procedings and the end result will be worse for the existing shareholders as dilution is the only possble solution.
There is a serious danger that the previously mentioned rightwing politician may again stage a coup this year and put in an even more extreme Board. If he himself is elected to the Board the banks will probably substitute - that is put in their own managers. The situation is insane.
I shall be going to the AGM on 17 June in Calais. I have a lift from another shareholder so we will go through on my pass, thus saving £39 at the present day return rate.
The problem is that competition with the ferries has driven the price down to a point where no-one is making any money - similar to the worldwide situation of airlines.