Eurostar back on the rails despite snow outage

The cross-channel train operator says growth in business passenger numbers has helped boost revenues. Meanwhile things aren't running so smoothly for BAA...

by Emma Haslett
Last Updated: 20 Jul 2011
If Eurostar suffered after the ‘fluffy snow’ fiasco in winter 09/10, it wasn’t for long. The cross-channel train operator has posted its results for last year, and it looks like things are chugging along nicely: the company says it carried 9.5m passengers last year, up by 3% from 9.2m in 2009. Revenues also rose by 12%, from £675.5m in 2009 to £760m in 2010. Do we feel a renaissance in rail travel coming on?

Eurostar says the boost in revenues is down, in part, to a recovery in the number of business travellers, who are paying for more expensive tickets. But it’s not just that: apparently passengers of all kinds are apparently increasingly being tempted away from airports. Whatever the reasons behind that (could we be getting greener, or is it just more convenient?), Chunnel users now account for three-quarters of air-rail passengers between Paris, Brussels and London.

This is all despite the debacle which saw 2,000 passengers trapped in the channel tunnel overnight in December 2009 after ‘the wrong kind of snow’ melted and leaked into a train’s engine. And then there was the more recent disruption just before Christmas, with thousands of people forming queues hundreds of yards long as Eurostar wrangled with cancellations after three trains broke down and it was forced to impose speed restrictions because of the snow.

The only potential spanner in the works now comes in the form of German rail operator Deutsche Bahn, which announced it’s planning to run a Frankfurt-to-London service through the channel tunnel, effectively putting it into competition with Eurostar. The French government has already done its bit to put the Germans off, objecting to the Siemens-designed high-speed trains Deutsche Bahn is planning to use on safety grounds. But it looks like Eurostar is going to have to get used to sharing its toys (or rails).

While international rail travel may be experiencing something of a resurgence, though, air travel is in danger of sliding off the runway. Following the chaos at Heathrow just before Christmas, BAA owner Ferovial, the Spanish infrastructure giant, is reportedly in talks to sell off a stake in the airports operator as it struggles with the huge debt burden it took on when it bought it. The company is currently in talks with the likes of Canadian pension fund Britannia Airport Partners and Singaporean sovereign wealth fund GIC to sell 10% of its 56% stake in BAA. That would allow Ferovial to remove BAA’s liabilities from its own balance sheet, which, at the moment, carries a not-to-be-sniffed-at €20.5bn (£17.3bn) of debt.

Ferovial CEO Inigo Meiras says he hopes to receive bids by the end of the month. And, given the company’s expecting to lose £50m once it’s paid compensation to disgruntled passengers (and airlines) after the snow disruption, the timing couldn’t have been better.  

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