Eurostar ‘cannot be allowed to collapse’ says Irish MEP
Eurostar’s annual revenues collapsed from £1billion (€1.1billion) in 2019 to about £180milllion (€208million) in 2020. It has already borrowed £400million (€450m) and received a cash injection of £170million (€197m) from its owners. The operator, which runs services between London St Pancras and Paris, Brussels and Amsterdam, suffered a huge slump in demand.
It carried 11 million passengers in 2019, but saw 95 percent fall in custom as the coronavirus pandemic restricted travel.
This led to talk of a potential UK bailout for the company, with French politicians calling for a joint London-Paris solution.
The French transport minister, Jean-Baptiste Djebbari, told a committee in January that the state would “be there at Eurostar’s side to maintain this strategic link between our two countries”.
Mr Djebbari said the government was working with the UK on “mechanisms for aid, proportional to everyone’s involvement in Eurostar."
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But Professor Iain Begg of the London School of Economics told Express.co.uk the UK has "no obligation" to help given it is no longer a stakeholder.
However, he added contributing to Eurostar's long-term future may be in the UK's interest.
He said: "There two aspects to this – one is whether there is an obligation or an interest to support Eurostar.
"There is no obligation in the sense that it's a company owned by French and Belgian railways as well as a hedge fund in Canada, but it may be in Britain's interest because Brits find the service desirable.
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"The next question is if it is not rescued, will something replace it or will there be uncertainty? Will there be a lack of connectivity between the UK and the continent?
"I think the danger is that there could be a lack of decision which would make things very difficult."
The UK sold its stake in Eurostar in 2015 for over £750million in what then-Chancellor George Osborne branded a "fantastic deal”.
However, Professor Begg believes Prime Minister Boris Johnson may be considering a reversal of this – buying back a stake in Eurostar.
He said: "One question that could be asked is whether there is a funding mechanism through which the British taxpayer is protected.
"Or it could be a reversal of what David Cameron did in 2015, and take a new equity stake.
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"That may be the sensible long-term option for the Brits, to renew its ownership of the enterprise.
"It's an option, but there aren't any easy options in this because there will be a howl if taxpayers' money is used to shore up a French company.
"I doubt that ordinary punters would be that exercised about it, but it's something the Government will consider, almost certainly the calculation that will be going on is whether the shareholders should be expected to extend their support for longer."
Eurostar's short-term future was secured last month after lenders reportedly agreed to allow the company to refinance its £400million debt.
Last week, reports in the New York Times claimed Eurostar will increase its timetable on May 27 to two trains per day on its once heavily traveled Paris-London route, up from just one round-trip train per day imposed during the pandemic.
A spokesman for Eurostar said that it had no new details on a financial rescue, but that “conversations are still progressing.”
The spokesman added that it was “too early to predict a recovery to pre-pandemic levels — this would be very much dependent on the easing of international travel restrictions which are yet to be confirmed.”