Eurostar Seeks U.K. Funding After State Handout to Airports
(Bloomberg) -- Channel Tunnel express-train operator Eurostar International Ltd. said it’s lobbying the British government for financial support after help was provided to English airports.
Chief Executive Officer Jacques Damas wrote to Chancellor of the Exchequer Rishi Sunak after the Treasury announced grants to hubs equivalent to their business-rate bills, up to a maximum of 8 million pounds ($11 million) each.
“The new scheme of rates relief for airports puts Eurostar at a direct disadvantage against its airline competitors,” a spokeswoman said, adding that the company “has been left fighting for its survival” by the coronavirus crisis.
Demand on Eurostar routes linking London with Paris, Brussels and Amsterdam has plunged by 95% as national lockdowns triggered by the pandemic stunt international travel. The company, which is 55% owned by French state railroad SNCF, says it has received money from shareholders, without disclosing how much. Other investors are funds Caisse de Depot et Placement du Quebec and Hermes Infrastructure, which control a combined 40% of the company, and Belgium, which has a 5% stake.
Eurostar, which employs 3,000 people and has its headquarters in London, said it has so far received only furlough funding from the U.K., compared with 1.8 billion pounds in British government support to aviation through loans, tax deferrals and financing. The company is also in talks with the French government, the spokeswoman said.
The U.K. Department for Transport said the government recognizes the financial challenges facing Eurostar and has been engaging with it on a regular basis since the start of the outbreak.
“We will continue to work closely with them as we support the safe recovery of international travel,” it said.
In addition to extending airport aid to include international rail services, Eurostar said it wants the U.K. to incorporate high-speed trains in its support for the travel sector, especially in light of its low-carbon credentials.
That should start with a reduction in access charges on High Speed 1, the U.K. section of the Channel Tunnel line, which are three times higher than those in France, the spokeswoman said.
While Britain has rescued domestic U.K. rail operators with emergency agreements and provided a 1.8 billion-pound bailout for the London subway, Eurostar hasn’t qualified for those programs, she said.
Damas took on the CEO role last month after a career at SNCF and its overseas arm Keolis, as well as SNCF-controlled Thalys, a provider of high-speed trains between Paris and Brussels with which Eurostar is merging operations.
He replaced Mike Cooper, who made a surprise exit to run the U.K.-based Arriva arm of Deutsche Bahn AG.
The Guardian reposted on Eurostar’s appeal to Sunak earlier.
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