Proposed new Channel Tunnel services discussion

[Mikey C]

Your contention was that the number was tiny. Yes there are many reasons why they are choosing to travel by air, but it's instructive to see that the air market remains substantive to Paris, compared to Brussels where direct flights from London are very hard to come by.

In terms of connecting flights, Paris CDG is the main hub of Air France, a massive airport and airline with flights all round the world. Brussels is a far smaller airport, and Brussels Airlines a much smaller airline, with far fewer long haul destinations. Amsterdam Schiphol is the main airport in the Benelux area, with loads of connecting flights there from the UK.

 

[NCT]

Your contention was that the number was tiny. Yes there are many reasons why they are choosing to travel by air, but it's instructive to see that the air market remains substantive to Paris, compared to Brussels where direct flights from London are very hard to come by.

Lower prices would definitely grow the overall market. I am less convinced that competition will actually lower prices given that the new operators won't be able to get a significantly higher seat density, they won't be able to get substantively lower track and station access charges as that's all regulated for competition anyway, there'll only be at most 3 companies running the trains which isn't really a market, and the airlines have been competing for ages so Eurostar fares are already structured in a way that offers low fares for "early bird" pickings and increases it's yield management to maximise revenue.

I think the double-decker trains Eurostar have just chosen may offer a few more tickets at the £39 price band, but that's because of higher seat density of the trainset not competition. The per-passenger charges for access to the Channel Tunnel mean £39 is probably as low as fares can go in the current charging regime.

Eurostar exercises monopolistic pricing. Flights are so indirect a competitor that they don't threaten Eurostar's monopolistic position.

Yes, a channel tunnel operation will have a lot of avoidable fixed costs, but Eurostar is making monopolistic profits. Eurostar's 2024 financial results show revenue of EUR 2 billion and an EBITDA of EUR 345 million, which is a nearly 15% profit margin. When competition comes along the supply curve shifts to the right, which means the equilibrium price - the point at which demand and supply curves cross, will be lower, and depending on the intensity of the competition, that equilibrium will be at a point where firms make normal profits only, which could be lower than 5%. Franchise owning groups were typically bidding at 3% profit margins. Market segmentation and promotions will mean some seats will be sold at below average costs.

As the rail price point moves, there will be a marginal impact on point-to-point flights.

 

[JamesT]

Eurostar exercises monopolistic pricing. Flights are so indirect a competitor that they don't threaten Eurostar's monopolistic position.

Yes, a channel tunnel operation will have a lot of avoidable fixed costs, but Eurostar is making monopolistic profits. Eurostar's 2024 financial results show revenue of EUR 2 billion and an EBITDA of EUR 345 million, which is a nearly 15% profit margin. When competition comes along the supply curve shifts to the right, which means the equilibrium price - the point at which demand and supply curves cross, will be lower, and depending on the intensity of the competition, that equilibrium will be at a point where firms make normal profits only, which could be lower than 5%. Franchise owning groups were typically bidding at 3% profit margins. Market segmentation and promotions will mean some seats will be sold at below average costs.

As the rail price point moves, there will be a marginal impact on point-to-point flights.

Note those numbers are for Eurostar as a whole, which includes various routes that don’t go anywhere near the tunnel.

 

[NCT]

Note those numbers are for Eurostar as a whole, which includes various routes that don’t go anywhere near the tunnel.

I'd be surprised if red cross subsidised blue in any significant way.

 

[coppercapped]

Eurostar exercises monopolistic pricing. Flights are so indirect a competitor that they don't threaten Eurostar's monopolistic position.

Yes, a channel tunnel operation will have a lot of avoidable fixed costs, but Eurostar is making monopolistic profits. Eurostar's 2024 financial results show revenue of EUR 2 billion and an EBITDA of EUR 345 million, which is a nearly 15% profit margin. When competition comes along the supply curve shifts to the right, which means the equilibrium price - the point at which demand and supply curves cross, will be lower, and depending on the intensity of the competition, that equilibrium will be at a point where firms make normal profits only, which could be lower than 5%. Franchise owning groups were typically bidding at 3% profit margins. Market segmentation and promotions will mean some seats will be sold at below average costs.

As the rail price point moves, there will be a marginal impact on point-to-point flights.

EBITDA is a questionable metric. It refers to a company's Earnings Before Interest, Taxes, Depreciation, and Amortisation and is a measure of the profitability (or otherwise) of only the business's operations. It ignores the costs of depreciation of the physical assets and amortisation of the non-tangible assets (such as the costs of borrowing and the paying back of borrowings) which are also part of the company's costs and which are necessary if the company wants to have a long term future.

The use of EBITDA rather suggests that the company has something to hide.

 

[HSTEd]

Its not surprising that a company with huge capital costs (like lots of very expensive trains) has a pretty large EBITDA.

== Doublepost prevention - post automatically merged: 2 Jan 2026 ==

Franchise owning groups were typically bidding at 3% profit margins. Market segmentation and promotions will mean some seats will be sold at below average costs.

Franchises have very small debts to service, because they aren't the ones borrowing to buy trains etc.
Therefore their EBITDA will be tend to be much lower than Eurostar's.

 

[NCT]

Hmmmm. In (extremely) crude terms, is Eurostar using EBIT a bit like a TOC financial result ignoring rolling stock capital lease charges?

 

[JamesT]

Hmmmm. In (extremely) crude terms, is Eurostar using EBIT a bit like a TOC financial result ignoring rolling stock capital lease charges?

Or it’s just a common measure used that makes for easy comparison with other companies. They file the usual accounts with companies house that include those other costs, nothing is hidden.

 

[NCT]

Ahh the accounts are freely accessible on Companies House ...

In the year ended 31 Dec 2024, Eurostar International Ltd had a revenue of £1,323.9m, and the Profit before tax (after depreciation, amortisation and finance income/costs) of £101.3m, a marginally worse performance than 2023. Below 10%.

EUROSTAR INTERNATIONAL LIMITED filing history - Find and update company information - GOV.UK

EUROSTAR INTERNATIONAL LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

Full accounts (the 56-page document)

I don't know what else there is to Eurostar Group apart from International Ltd - the difference between the £1,323.9m and the EUR 2 million reported on this webpage seems larger than can be explained by the exchange rate ...

 

[TheWierdOne]

I don't know what else there is to Eurostar Group apart from International Ltd - the difference between the £1,323.9m and the EUR 2 million reported on this webpage seems larger than can be explained by the exchange rate ...

Could the UK accounts be only for the UK routes?

 

[zwk500]

Could the UK accounts be only for the UK routes?

There's a note under the revenue section suggesting that for the most recent accounts, the 2 'halves' of Eurostar are still separate companies, if I've read it right.

Apologies that I cant provide the quote directly, I'm on my phone and copying text from the file available is rather tricky.

 

[Trainbike46]

Ahh the accounts are freely accessible on Companies House ...

In the year ended 31 Dec 2024, Eurostar International Ltd had a revenue of £1,323.9m, and the Profit before tax (after depreciation, amortisation and finance income/costs) of £101.3m, a marginally worse performance than 2023. Below 10%.

EUROSTAR INTERNATIONAL LIMITED filing history - Find and update company information - GOV.UK

EUROSTAR INTERNATIONAL LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

Full accounts (the 56-page document)

I don't know what else there is to Eurostar Group apart from International Ltd - the difference between the £1,323.9m and the EUR 2 million reported on this webpage seems larger than can be explained by the exchange rate ...

Eurostar group consists of Eurostar international ltd. (Eurostar blue), and THI factory SA (Thalys / Eurostar Red). THI factory SA is based in Belgium so won't be on UK companies house, but on whatever the Belgian equivalent is.

There's a note under the revenue section suggesting that for the most recent accounts, the 2 'halves' of Eurostar are still separate companies, if I've read it right.

This is correct.

Below is a quote from SNCF:

The holding company is based in Brussels and owns 100% of shares in Eurostar International Limited (Eurostar) and THI Factory SA (Thalys), which remain rail companies in their own right. Eurostar is headquartered in London and Thalys in Brussels.

For clarity, the holding company is Eurostar group.

 

[NCT]

Thanks to the responses above. A <10% profit before tax is not as bad as I thought (would still like competition to squeeze that to below 5%). The blue revenue also means the red revenue really is quite tiny (though not too surprising come to think of it - only hourly Paris - Brussels with short trains).

 

[BRX]

Important caveat - E* will only sell you the £39 fare as part of a return trip, and it's only on the 06.01 train. The comparable 18.01 train starts from £75

This is the thing with eurostar! It used to be that you could usually get something <£50 on a semi-convenient train if you just booked somewhat in advance. But now it usually has to be quite a bit in advance, on a really early or late train, and often it only works out for one leg. And they have their penalty for single fares on top of it all.

 

[Bald Rick]

Thanks to the responses above. A <10% profit before tax is not as bad as I thought (would still like competition to squeeze that to below 5%). The blue revenue also means the red revenue really is quite tiny (though not too surprising come to think of it - only hourly Paris - Brussels with short trains).

Don’t forget those profits have been paying back some rather large loans made to the company to keep it afloat in 2020/21/22

 

[zwk500]

This is the thing with eurostar! It used to be that you could usually get something <£50 on a semi-convenient train if you just booked somewhat in advance. But now it usually has to be quite a bit in advance, on a really early or late train, and often it only works out for one leg. And they have their penalty for single fares on top of it all.

You can still book fares cheaper than a Low cost airline at 6-8 weeks notice.
What booking horizon is reasonable to compare affordability? Its hardly a societal necessity for everybody to be able to make last-minute jaunts to Paris.

 

[BRX]

You can still book fares cheaper than a Low cost airline at 6-8 weeks notice.
What booking horizon is reasonable to compare affordability? Its hardly a societal necessity for everybody to be able to make last-minute jaunts to Paris.

I'm mainly just grumbling that it's become more expensive than it used to be a few years ago. And the longer term picture is that they have replaced the relatively affordable ways of crossing the channel that used to be open to the foot passenger when ferry crossings were still an easily accessible option. In any case I look forward to them no longer having a monopoly.

 

[Bald Rick]

I'm mainly just grumbling that it's become more expensive than it used to be a few years ago. And the longer term picture is that they have replaced the relatively affordable ways of crossing the channel that used to be open to the foot passenger when ferry crossings were still an easily accessible option. In any case I look forward to them no longer having a monopoly.

Most things are more expensive than a few years ago. Retail prices have increased 43% since 2019, so (say) a £39 fare one way then would be £56 now. Also eurostar will be pricing with comparisons to their competitors, and airline prices have certainly risen in that time, partly due to some changes to the French version of Air Passenger duty and local airport taxes.

 

[Eurostarosaur]

The inflation point is definitely true, but I think generally speaking a lot of people look at Eurostar prices for a weekend break and outside of winter, you're talking about 150-200 quid return which excludes a lot of the market. I have in recent years managed to do some great city breaks for 150-200pp including flights and hotels, certainly not prepared to pay that much just for train tickets. Obviously mass market tourists are just one part of the market, but there is clear potential to fill more services at the right price point.

Either way, it's amazing to imagine that in just 5 or 6 years time, we could be seeing 20 Virgin services a day and 10 Trenitalia each way!

Paris would be 15ish Eurostar + 13 Virgin + 10 Trenitalia = 38 a day each way

 

[Austriantrain]

Paris would be 15ish Eurostar + 13 Virgin + 10 Trenitalia = 38 a day each way

All of them well filled, I imagine, since it seems to me that E* is restricting capacity in order to achieve higher yields. Could really put a dent into air traffic (connecting traffic excluded of course), provided there will be some „budget“ offers.

 

[michael8]

I'm mainly just grumbling that it's become more expensive than it used to be a few years ago. And the longer term picture is that they have replaced the relatively affordable ways of crossing the channel that used to be open to the foot passenger when ferry crossings were still an easily accessible option. In any case I look forward to them no longer having a monopoly.

You can still get a 2-3 hour crossing on a fastcat from Portsmouth to Cherbourg for £25 each way last time I checked. There will always be a way, as long as there are humans desirous of making that route.

 

[signed]

since it seems to me that E* is restricting capacity in order to achieve higher yields

I may be wrong but I don't believe there is any stock left to run more services, both on the red and the blue sides.

== Doublepost prevention - post automatically merged: 5 Jan 2026 ==

You can still get a 2-3 hour crossing on a fastcat from Portsmouth to Cherbourg for £25 each way last time I checked. There will always be a way, as long as there are humans desirous of making that route.

That doesn't exist anymore, the fastest ferry outside of Dover-Calais/Dunkirk is Poole to Cherbourg at 4h30 and the overall cheapest for a foot passenger is Dieppe to Newhaven at between 4h30 and 5h (findable around £30)

 

[Alpine Rider]

All these ideas of direct trains from the UK to additional destinations all over Europe seem total fantasy.

We have already seen how the cost and logistical challenges of providing UK & French border security at two existing stations on High Speed One is probably the real reason why Eurostar have shown no desire of reopening them. Are Eurostar or any other rail operator really going to commit to funding the cost of providing EU & UK border force staff at locations all over europe just so people can enjoy a direct train???

The returning ski train service shows the way - with all passengers having to alight and pass through Border checks at Liile Europe and before boarding an entirely different train for the journey through the tunnel to the UK.

So how can the UK offer better rail connections to Europe?

Rather than launching any more direct services, with all the security challenges and costs - probably the easiest and cheapest solution is to reconfigure Lille Europe to become a central hub for rail travellers to/from the UK to support a new regular high capacity shuttle service from St Pancras and (possibly Ashford).

This would better utilise existing passport and border checking facilities in the UK and Lille.

Look at a map and you will see that just south of the existing Lille Europe TGV station is the huge Lille Flandres rail complex where there is a fair bit of former sidings and waste land much of which is rarely used. OK its SNCF land so nothing happens quickly but there is the potential for the land to be made available to UK and continental operators to prepare and operate additional high speed services to destinations running right across Europe from Lille Europe. As these services would then be entirely within the EU/Schengen they would not need any Border passport control costs and permit sale of tickets for travel between intermediate stations.

 

[Austriantrain]

All these ideas of direct trains from the UK to additional destinations all over Europe seem total fantasy.

We have already seen how the cost and logistical challenges of providing UK & French border security at two existing stations on High Speed One is probably the real reason why Eurostar have shown no desire of reopening them. Are Eurostar or any other rail operator really going to commit to funding the cost of providing EU & UK border force staff at locations all over europe just so people can enjoy a direct train???

The returning ski train service shows the way - with all passengers having to alight and pass through Border checks at Liile Europe and before boarding an entirely different train for the journey through the tunnel to the UK.

So how can the UK offer better rail connections to Europe?

Rather than launching any more direct services, with all the security challenges and costs - probably the easiest and cheapest solution is to reconfigure Lille Europe to become a central hub for rail travellers to/from the UK to support a new regular high capacity shuttle service from St Pancras and (possibly Ashford).

This would better utilise existing passport and border checking facilities in the UK and Lille.

Look at a map and you will see that just south of the existing Lille Europe TGV station is the huge Lille Flandres rail complex where there is a fair bit of former sidings and waste land much of which is rarely used. OK its SNCF land so nothing happens quickly but there is the potential for the land to be made available to UK and continental operators to prepare and operate additional high speed services to destinations running right across Europe from Lille Europe. As these services would then be entirely within the EU/Schengen they would not need any Border passport control costs and permit sale of tickets for travel between intermediate stations.

In truth, you need Lille and Brussels as connecting hubs and if onward trains are provided, you would have lots of one stop options (while a long journey, why not an ICE L Brussels - Cologne - Hamburg - Copenhagen for instance, or of course a Brussels - Berlin?). With a bit of judicious timetabling, the current Lille Europe should do fine. Short connections on the way from London, on the return either a leisurely hour for security and immigration or a „lop-sided“ Brussels - Lille - London timetable (half hour shift compared to the other direction, so asymmetrical) and 30 and a bit minutes to change (that would of course require migration and security to work like clockwork).

None of this BTW would preclude the occasional direct service where it can be justified.

If E* or any of the new entrants play ball, Brussels should not even be that difficult. Lille of course is a different matter, considering that the only onwards Transporteur will be SNCF…

 

[TheWierdOne]

I think the new destinations mooted in Germany and Switzerland have a better chance of happening than we give them credit for, given that both have the national governments of both ends looking at them. The border check issue is by no means insurmountable otherwise Amsterdam would never have gotten off the ground, and look how successful that has been since, despite having started right around the covid dark ages.

 

[Austriantrain]

I think the new destinations mooted in Germany and Switzerland have a better chance of happening than we give them credit for, given that both have the national governments of both ends looking at them. The border check issue is by no means insurmountable otherwise Amsterdam would never have gotten off the ground, and look how successful that has been since, despite having started right around the covid dark ages.

Maybe, but hubs in Brussels and Lille would enormously expand potential destinations, so I don’t see why they wouldn’t be a good thing, even if a couple of direct trains happen. Agreed, German destinations can as easily be reached with a single change in Cologne or Frankfurt, provided there are enough direct trains (Amsterdam-style level), but the whole of France is basically impossible without a Lille hub.

 

[NCT]

If only SNCF would treat Lille as a taktfahrplan node with the (pretty much) clockface London - Brussels services and France - Brussels Paris avoider TGVs. In the to-London direction passengers just step back one hour while they go through the shenanigans.

 

[Austriantrain]

If only SNCF would treat Lille as a taktfahrplan node with the (pretty much) clockface London - Brussels services and France - Brussels Paris avoider TGVs. In the to-London direction passengers just step back one hour while they go through the shenanigans.

Exactly this.

 

[TheWierdOne]

If only SNCF would treat Lille as a taktfahrplan node with the (pretty much) clockface London - Brussels services and France - Brussels Paris avoider TGVs. In the to-London direction passengers just step back one hour while they go through the shenanigans.

This would unfortunately require SNCF to run a passenger-centric railway that acknowledges people might not want to travel to or from Paris

 

[Austriantrain]

This would unfortunately require SNCF to run a passenger-centric railway that acknowledges people might not want to travel to or from Paris

Oh I think NCT knows. So do I. The sad thing is how easy it would be to have such a timetable.