Eurostar ‘cannot be allowed to collapse’ says Irish MEP

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Prime Minister Boris Johnson has warned the UK could endure another coronavirus spike if cases are imported from Europe, which is in the midst of another wave of infections. This comes as he also admitted it is “too early to say” whether foreign holidays will be allowed. This represents yet more unwanted news for Eurostar, which has faced a severe economic downturn, plunging the future of the company into doubt. Eurostar, which runs services between London St Pancras and Paris, Brussels and Amsterdam, carried 11 million passengers in 2019.

But sources close to the Cross-channel operator warned Eurostar had already faced a 95 percent fall in demand, and warned travel restrictions would hamper the operator even more despite funding discussions taking place.

Eurostar’s annual revenues collapsed from £1billion (€1.1bn) in 2019 to about £180milllion (€208m) in 2020. It has already borrowed £400million (€450m) and received a cash injection of £170million (€197m) from its owners.

A source close to Eurostar said this week: “Eurostar has been providing a bare minimum service until now, it is already at breaking point.

“If funding doesn’t come in place and further measures restrict travel, we could be feeling the pinch of bankruptcy later on this year.”

In January, France attempted to pressure the UK into providing funding for Eurostar in January as the company’s chief Jacques Damas warned a “catastrophe is possible”.

Eurostar is 55 percent owned by the French state railway SNCF, 40 percent by infrastructure funds CDPQ and Hermes, and five percent by Belgian railway SNCB.

France’s junior transport minister, Jean-Baptiste Djebbari, told the country’s parliament that he was talking to the Government in Britain about helping to save Eurostar.

Mr Djebbari said the French state would be “at Eurostar’s side in order to maintain this strategic link between our two countries”.

He added: “We are working with the English on mechanisms for aid based on our involvement in Eurostar so we can financially sustain its business model.”

Last week, Eurostar and its stakeholders applied yet more pressure on governments in London and Paris as it looked for a bailout.

Jean-Pierre Farandou, chief executive of French state rail company SNCF, told the Financial Times: “We are getting closer to the moment when Eurostar will have real cash flow problems… by next month, we have to conclude these discussions.

“We hope that it will be weeks [for a rescue deal] because the financial situation is going to be very difficult at the end of May, start of June.”

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The Government has so far been reluctant to step in, saying it is the French government’s company to save.

Grant Shapps, Transport Secretary, said in February “It’s primarily a French lead, but we’ll be as helpful as possible.

“It’s not our company to rescue – it’s majority owned by the French state.

“We’re very, very keen for the Eurostar to survive, and we’ll wait to see the plan [from SNCF]”.

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