Eurostar, the cross-channel train operator, said today that ticket sales were up nearly 11% last year, boosting revenues from £599m to £664m, as the weakness of the pound encouraged more of our European brethren to come and see Big Ben. Eurostar had a cracking start to 2008: the opening of the new high-speed link at St Pancras improved the passenger experience and reduced journey times, while higher fuel costs made driving or flying much pricier. And despite a much slower second-half, the train operator seems pretty optimistic about its prospects for 2009...
All in all, Eurostar carried a record 9.1m passengers last year, 10.3% up on 2008. After it moved its base to the swanky new St Pancras terminal and opened the high-speed link (which now gets you to Paris in two hours 15 minutes), passengers from around the UK flocked to use the service, boosting passenger numbers by 20% in the first half of the year. The travails of the pound have also helped, according to CEO Richard Brown: ‘While the pound is weak, that means that London is much cheaper for people coming from France and Belgium, so we have seen 15 per cent and more growth in visitors.’ (So he'll be glad to see sterling down again today).
The figures would actually have been even better had it not been for a fire in the Channel Tunnel in September, which caused huge disruption and forced the cancellation of dozens of trains. The tunnel still hasn’t been properly repaired – Eurostar said today that it wouldn’t be back on a full timetable until mid-March – and this has clearly constrained passenger growth in the second half of the year.
Indeed, bullish though Brown was today, the second-half figures must give him some cause for concern. Apparently its fourth quarter passenger numbers were more or less the same as last year – the fire disruption won’t have helped, but fewer business-class passengers and reduced leisure travel (both due to the economic climate) were also big contributing factors.
However, Brown is convinced that the long-term trends are all in Eurostar’s favour. On Radio 4’s Today Programme this morning, he admitted that the climate was ‘challenging’, but insisted that people now prefer to travel by high-speed rail rather than short-haul air: ‘They are switching because rail journeys are faster, more punctual, more convenient and have less environmental impact.’ He may be right about all this (and Eurostar was recently a big winner in our Green Awards) – but in the current climate, he’ll still do well to hit his target of 10m passengers in 2009...
In today's bulletin:
Tesco finds itself in the slow lane
Brown mulls loan guarantees as downturn gets scary
Eurostar's sterling display as sales hit record level
Crispy crisis as Findus pancake
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