A high-speed line and new stations boost Eurostar business

Eurotunnel’s number one client, Eurostar, had a successful 2007. The year saw the first UK High Speed line coming into service and the opening of the new Saint Pancras International station in London, as well as Ebbsfleet International in Kent. These developments are boosting passenger traffic and further growing the market between the UK and the Continent.

• 8.26 million passengers in 2007 between London, Paris and Bruxelles, which was 5.1% more than in 2006
• 2hrs15mins: the journey time between London and Paris on Eurostar (2hrs30mns in 2006) since 14 Novembre 2007

Eurostar filed remarkable results for 2007. Its high speed trains carried 8.26 million passengers between Paris, London and Brussels, which was 5.1% more than in 2006. The launch of the UK high speed line High Speed 1 on 14 November raised the growth in passenger traffic even higher, with 13% more passengers carried last December than in December the previous year.

As the revenue Eurotunnel receives from Eurostar is relative to the number of passengers carried, the rail operator’s strong traffic generated higher revenues for Eurotunnel. In 2007, revenues from the rail networks were up 3% compared with the previous year. The rail networks will benefit from the savings made by Eurotunnel on rail infrastructure costs. More generally, the agreement establishes a favourable climate for greater cooperation between the rail networks and Eurotunnel. 

Two new, easily accessible stations

The relocation of Eurostar’s London station from Waterloo International to Saint Pancras International has given millions more passengers the opportunity to explore the high speed network. The handy location of the new station gives passengers easy access to London’s six Underground lines and national rail operators linked to Northern England and Scotland.

Ebbsfleet International, operating since 19 November 2007, was offi cially opened on 4 February 2008, on the high speed line in north Kent. It is strategically located near Dartford, the Bluewater shopping centre, and next to key road links such as the M25. This new station offers an attractive alternative to London’s airports.

Eurostar’s range will be extended again in 2008 with the scheduled opening of the high-speed line between Brussels and Amsterdam, giving access to the second largest passenger market in Europe.

The completion of the high speed line has reduced travel time by at least 20 minutes, with London now just 2 hrs 15 mins from Paris, 1 hr 51 mins from Brussels, and 1 hr 20 mins from Lille!

Eurostar punctuality remains high, with 91.5% of trains arriving on time or early in 2007. This confi rms the quality of Eurotunnel’s traffic regulation system, which aims to optimise the Tunnel’s availability for Eurostar. Eurostar’s reliability has also improved as it now operates solely on the recently completed high speed lines and no longer uses the slower UK domestic lines.
The combination of Eurostar’s new achievements and its environmental commitment (see box) have allowed the company to gain market share in the face of competition from airlines. Eurostar has adapted and increased its routes between Paris and London, adding a 16^th weekly departure in November 2007 and a 17^th at the start of 2008. Up to ten trains leave Brussels every day. By increasing its transport capacity, Eurostar is expanding its potential for traffic growth, and for Eurotunnel’s revenue. Eurostar business is continuing to grow into 2008. The eagerly awaited UK high speed line holds great promise for Eurostar, carrying ever more passengers to ever more destinations via the Channel Tunnel.

Open access and simplified prices, initiatives to boost rail freight

Faced with an alarming decline in rail freight traffic, Eurotunnel reacted – along with its main partners – and redefined the conditions for using the Tunnel. The resulting measures should see a rapid increase in rail freight, up from 1.2 million tonnes in 2007 to an annual figure of 3 million tonnes.

The Channel Tunnel was originally conceived and designed to handle 10 million tonnes of rail freight a year, but this objective
has never been attained. The peak reached was just 3 million tonnes in 1997. Ten years on, in 2007, the annual tonnage transported by the EWS and SNCF freight companies fell to 1.21 million (down 23% from 2006) or less than 2% of the potential
market between Continental Europe and the UK. A number of factors account for this situation, including the complexity of setting up cross-border rail transport in Europe, the successive reorganisation of operating structures for cross-Channel freight in the UK, the lack of competitiveness of rail versus road transport (due in particular to the fixed cost of border infrastructures) and the financial difficulties of rail freight in France.

In 2007, the Group reacted strongly to reverse this trend. Eurotunnel approached all of its cross-Channel rail freight partners, including freight operators, contractual suppliers and governments, to rescue the business and establish conditions for growth. Their joint determination was rewarded on 23 October, when Eurotunnel introduced a new comprehensive, competitive strategy based on three axes: developing Open Access for all freight train operators - whether existing or new; efficient processing of border controls; and simplifi ed, competitive pricing.

The average toll was set at €4,500 per train, an attractive price for companies and neutral on infrastructure. At the same time, the pricing mechanism was clarified: a toll per train, adjusted to reflect speed and peak or quiet periods, allowing operators to optimise their loads. In addition, operators were guaranteed open, efficient and fair access to freight facilities with a €600 ceiling on the cost of essential cross-Channel services, such as processing border controls and the use of specialised “Class 92” cross-Channel locomotives.

On 26 November 2007, Europorte 2, Eurotunnel Group’s freight operations subsidiary, in partnership with SNCF, took over ground operations for cross-Channel traffic in the Calais-Frethun border zone (coupling/uncoupling, shunting, safety inspection, security controls, administration, etc.) as well as the traction of freight trains in the Tunnel.

These measures help to make the overall cost of freight rail transport competitive compared to road haulage, and should encourage greater use of trains, with corresponding pollution gains.

This strategy gives Eurotunnel the opportunity to tap into new markets. The potential is considerable, particularly for inter-modal transport and full trains. The new Tunnel access conditions should help turn around the decline in cross-Channel traffic and see a rapid return to the freight levels last seen in 1997. The aim is to reach 6 million tonnes a year over time.

EWS (English Welsh & Scottish Railway Ltd), part of the freight division of Deutsche Bahn, has already announced its Tunnel traffic will be doubling from 2008-2009 with the setting up of a European container network under the Euro Cargo Rail brand. This group subsidiary will run regular services between Belgium, Germany, Italy, France, Spain, Switzerland and, in the UK, the business centres of the Midlands, the North West and Scotland. SNCF freight is also working to develop its own European network.