Proposed new Channel Tunnel services discussion

[Peterthegreat]

Since the subject of price has come up, it's important to remember that while Eurostar's monopoly doesn't exactly encourage price reduction - and while there is real world evidence that open access on high-speed routes works really well throughout Europe like in France, Italy and Spain - Eurostar is a unique situation where the operator is paying for no less than five track access charges for their services and also have to deal with barriers not seen with the aforementioned networks where competition is on a mostly domestic level.

Optimistically I would think prices could be brought down to maybe sales level fares, ie. £70 return for standard, but I would definitely not expect Lumo level fares. It's also important to remember that Virgin's business model leans more towards a premium rail experience, hence why they only really bid for intercity franchises like west coast. I can see the standard fares being comparable while the premium products is where the real competition is at, but I wouldn't expect to see low-cost fares, just a reduction in the highest priced ones.

Quite.
In 2025 Eurostar's (blue) track access fees totalled £586m.
A total of 12.2 million passengers were carried.
Therefore on average £48 per passenger went on track access fees alone. This is before staffing costs, maintenance costs and all the other associated costs are taken into account.
Running high speed trains through the the tunnel is not cheap!

 

[AlastairFraser]

In their 2019 published numbers, Eurostar (‘blue’) average revenue per single trip passenger was £89.

Their profit margin was 6%, which means their average cost per single trip passenger was £83.60 (ish).

Add 7 years of inflation to that cost, plus the significant cost of the debt they took on to survive through COVID, and their costs per passenger will now be rather higher.

So you can see that selling tickets at £75 a go - even at an average of £75 a go, would be losing money.

You have to ask why their costs are so high then (bar COVID debt).
Is it staff costs being too high, or Eurotunnel ripping them off (maybe some regulatory strong arming could make life difficult for them in Britain, unless they reduce their tunnel costs to a reasonable level - even with the tunnel debt and maintenance, the queues for Le Shuttle stretch for miles and the staff on that are mostly agency)?

 

[HSTEd]

HS1 access charges, I like access charges on the rest of the UK railway, are set on a fully commercial basis. HS1 is operated by a concession that the government granted for a quick buck in 2010.

Access charges on the classic railway don't cover the fully burdened cost of capacity after all.

 

[Bald Rick]

You have to ask why their costs are so high then (bar COVID debt).

Access charges and terminal charges.

The access charges are already supervised by the ORR this side of the channel, and ORR jointly with a French counterpart for the tunnel itself.

As it happens, the marginal charges for the tunnel itself on a per passenger basis (£23 IIRC) are not that much higher than they were 30 years ago in cash terms, ie they are much cheaper in real terms. There is also a per train charge as well.

 

[The Ham]

You have to ask why their costs are so high then (bar COVID debt).
Is it staff costs being too high, or Eurotunnel ripping them off (maybe some regulatory strong arming could make life difficult for them in Britain, unless they reduce their tunnel costs to a reasonable level - even with the tunnel debt and maintenance, the queues for Le Shuttle stretch for miles and the staff on that are mostly agency)?

Possibly down to fact that they are only running a limited number of services.

I often argue that for the UK rail network we need to look at places where there's limited frequencies but could do marginally better than break even on running an extra and run that train.

The reason being, is that if one line costs £20 million to keep open and that's seeing 10 trains a day, each with 300 people (and assuming 350 days a year to make the maths easy) then each person has to pay £20.10 to keep the line open and £5 to run the trains. With a total cost of £25.10, if the average train ticket costing £23 there's a lot of subsidy needed to keep that line running (circa £2.2 million).

However, if you double the trains you are now needing to pay £7 to run the trains, however the frequency is now double and so the trains are more than twice as attractive and so even if you only see 220 people per train the cost per person has fallen to £13 so the total cost is now £20.

Only to fill the seats the average train ticket fell to £19, that station still means that there is a subsidy of £1.55 million but that's about 30% lower than it was before.

However, that doesn't factor in the fact that there's now likely to be far more economic activity due to the circa 45% extra people moving about and so are either likely to be paying more taxes (be that by being paid more and/or paying for more stuff) and so the cost to pay for that reduced subsidy is a smaller percentage of GDP.

That would even be the case if we played with the numbers so that the cash value of subsidy was the same or even (up to a point) marginally higher.

As others have highlighted, if there's a (say) 30% uplift in trains running on the infrastructure a lot of the infrastructure charges are now spread across more trains and so all the operators can maintain their profit percentages whist seeing falls in ticket prices.

Yes the above is an over simplification, as I've assumed that the variable costs of running more trains are included within the cost to run the extra trains and various other simple steps.

However, it highlights that fixed costs spread over many more people can still result in noticeably cheaper tickets.