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.

 

[signed]

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)?

HS1 and LGV track charges are ludicrously expensive (as Trenitalia is starting to realize)

 

[AdamWW]

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).

But worth I think stating explicitly that some of that 6% will be overheads that aren't proportional to the number of passengers (e.g. management, running a depot) so the cost per passenger goes down the more passengers you carry.

What's really needed is the gross profit per passenger.

== Doublepost prevention - post automatically merged: Today at 08:15 ==

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

Yes indeed - that's what I'm trying to argue above.

 

[BRX]

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.

However this average cost per customer includes the c. 25% of passengers travelling in premier/plus and paying quite a bit more than standard psssengers. So the average for a standard class seat must be a bit lower than your number - and a hypothetical future operator focussed on cheap tickets might to be able to do better by running fully 2+2 seating and doing away with extras such as catering & bar cars.

 

[AdamWW]

However this average cost per customer includes the c. 25% of passengers travelling in premier/plus and paying quite a bit more than standard psssengers. So the average for a standard class seat must be a bit lower than your number - and a hypothetical future operator focussed on cheap tickets might to be able to do better by running fully 2+2 seating and doing away with extras such as catering & bar cars.

Does anyone know if the evacuation procedures set a limit on number of passengers per train?

 

[Bald Rick]

However this average cost per customer includes the c. 25% of passengers travelling in premier/plus and paying quite a bit more than standard psssengers. So the average for a standard class seat must be a bit lower than your number - and a hypothetical future operator focussed on cheap tickets might to be able to do better by running fully 2+2 seating and doing away with extras such as catering & bar cars.

This is costs, not revenue.

 

[absolutelymilk]

This is costs, not revenue.

But if their average cost per passenger is £83.60, they could charge (say) £75 per standard passenger and £120+ for premier/plus and still make a profit

 

[Mikey C]

It's not just the London-Paris etc. market, if people saw that they could easily get a weekend in Paris for £78 return they'd be abandoning their plans to go to Prague and getting a bargain trip to Paris instead.

Paris isn't that much of an attraction, it would be bizarre if people voluntarily stopped flying to all of Europe's further away destinations, and instead only went to places reachable by HS1.

I love visiting Belgium, and 2 years running have had a short break there, starting with a train to Brussels, but I wouldn't go any more regularly if prices were reduced.

In August I had a 10 day rail based trip down western France, but used Ryanair flights to start and finish (Nantes and Biarritz airports), as it was cheaper, but also way quicker and easier than using the train to get there via Paris. Especially coming back from Bayonne, which is a long trek by train. And that's a country currently served by Eurostar

Last year I finished a rail holiday with the Eurostar from Amsterdam, but again started with a flight (Ryanair to Nuremberg) as it was so much quicker.

 

[signed]

It's not just the London-Paris etc. market, if people saw that they could easily get a weekend in Paris for £78 return they'd be abandoning their plans to go to Prague and getting a bargain trip to Paris instead. The limit is only how much accommodation Paris and London have for each other's population to spend a weekend away. At that price, I wouldn't be surprised to see day trips becoming more popular.

The transport price ain't the end all be all, it is MUCH cheaper to stay in Prague and most of central Europe rather than Paris. Paris is as expensive hotel wise as London is, if not more due to the tourism volume.

So you pay £78pp, but you have €100-150 in hotels alone.

Ditto for Dublin, you can go from London to Dublin for £40 on Ryanair, but then you have to pay north of 120-150€/night for an hotel.

 

[NCT]

Not to mention when people go on city breaks they go to the places they haven't been to before.

 

[Krokodil]

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

That average will include all three classes of travel. Regardless, if standard class prices were capped at £100 single it would be a vast improvement on the present situation.

But worth I think stating explicitly that some of that 6% will be overheads that aren't proportional to the number of passengers (e.g. management, running a depot) so the cost per passenger goes down the more passengers you carry.

Do the track access charges scale linearly? As in, if you run fifty trains do you get charged fifty times the fee for one train, or does the cost per train reduce because the fixed costs are spread out?

 

[cle]

Paris isn't that much of an attraction, it would be bizarre if people voluntarily stopped flying to all of Europe's further away destinations, and instead only went to places reachable by HS1.

It does happen to be the most visited city and country in the world, so I think making it more accessible to more people - or giving an alternative experience to Eurostar, might spur on more interest. Do not underestimate frequent flyers / sky team open jaw type itineraries too (currently going via AF) - and some discretionary spike in business travel too.

And there are still some people who are conscious to fly less, due to the environment or the experience - especially crappy budget airlines. This is infinitely more civilised and less stressful.

 

[Mikey C]

It does happen to be the most visited city and country in the world, so I think making it more accessible to more people - or giving an alternative experience to Eurostar, might spur on more interest. Do not underestimate frequent flyers / sky team open jaw type itineraries too (currently going via AF) - and some discretionary spike in business travel too.

And there are still some people who are conscious to fly less, due to the environment or the experience - especially crappy budget airlines. This is infinitely more civilised and less stressful.

Paris isn't France though, and even on the TGV, the regions are a long journey away.

On my trip for example, I could fly back from Biarritz airport, a short bus ride from Bayonne airport, for the evening flight to Stansted, from where a National Express coach would take me home.

To take the train back would require a 4hr plus train to Paris Montparnasse, then a Metro across to Gare du Nord, for the Eurostar. A possible journey, but slower and more expensive. And with the cross Paris trek, more stressful. A direct train from Bayonne to Lille would have made this a more appealing of course.

Budget airlines aren't fun, but for 2hr flights are perfectly acceptable.

 

[BRX]

Paris isn't France though, and even on the TGV, the regions are a long journey away.

On my trip for example, I could fly back from Biarritz airport, a short bus ride from Bayonne airport, for the evening flight to Stansted, from where a National Express coach would take me home.

To take the train back would require a 4hr plus train to Paris Montparnasse, then a Metro across to Gare du Nord, for the Eurostar. A possible journey, but slower and more expensive. And with the cross Paris trek, more stressful. A direct train from Bayonne to Lille would have made this a more appealing of course.

Budget airlines aren't fun, but for 2hr flights are perfectly acceptable.

Sure, some people, for some journeys, still wouldn't be interested in the Eurostar if the price came down.

But many people, for many journeys, would.

 

[Bald Rick]

But if their average cost per passenger is £83.60, they could charge (say) £75 per standard passenger and £120+ for premier/plus and still make a profit

And that’s pretty much the situation as it was in 2019, in fact the average standard fare was probably less than £75.

Don’t forget that there are plenty of people travelling on fares that are discounted from the price you see on the website. Seniors, kids, rail staff, groups, interrail, frequent travellers, package deals, etc.

 

[BRX]

And that’s pretty much the situation as it was in 2019, in fact the average standard fare was probably less than £75.

Don’t forget that there are plenty of people travelling on fares that are discounted from the price you see on the website. Seniors, kids, rail staff, groups, interrail, frequent travellers, package deals, etc.

I'm not clear about the line of argument.

Originally I thought you said that it's unrealistic to expect that Eurostar could offer one way prices at something like £75. And you explained that by saying that in 2019 you estimated their average cost per passenger to be about £83, and we should add a fair bit onto that given things that have happened since 2019.

So let's speculate that it (the average cost per passenger) is £100 in 2026. How do we get from that figure to saying that it's unrealistic that £75 fares could be offered? Or do you mean that it's unrealistic to expect that fares could drop to becoming £75 on average? Because I don't think that's what was originally being suggested.

 

[Bald Rick]

I'm not clear about the line of argument.

Originally I thought you said that it's unrealistic to expect that Eurostar could offer one way prices at something like £75. And you explained that by saying that in 2019 you estimated their average cost per passenger to be about £83, and we should add a fair bit onto that given things that have happened since 2019.

So let's speculate that it (the average cost per passenger) is £100 in 2026. How do we get from that figure to saying that it's unrealistic that £75 fares could be offered? Or do you mean that it's unrealistic to expect that fares could drop to becoming £75 on average? Because I don't think that's what was originally being suggested.

I was replying to the suggestion that

Even £50-£75 each way would be enough to start turning the tide and operators would still make decent profits with a high load factor

ie that fares ranging from £50-£75 in standard with high load factors would enable decent profits. (You can already get fares in that range now at the low end, and many people travel at this price and lower either through booking early, or from having some form of discount as I explained up thread). I took that to mean that would be the price range for all, or at least a significant majority, of standard tickets.

My assertion is that having standard seats confimed to that price range will cause big losses, and indeed even with a wider range, average fares in that price range will similarly cause losses.