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January 19, 2021

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Home » Business » Transport

Eurostar seeks bailout from UK

Source: AFP | 00:05 UTC+8 January 19, 2021 | Print Edition

Eurostar, whose train services through the Channel Tunnel have been decimated by the coronavirus pandemic, has called on the UK government to provide it with the same financial support handed to grounded airlines over concerns about a possible collapse.

Christophe Fanichet, a senior executive from SNCF, the French state railway and part-owner of Eurostar, said on Friday that the London-based company was in “a very critical” state after a collapse in travel between Britain and the European continent.

And following a call by British businesses for a UK government rescue of London-based Eurostar, the company yesterday reiterated the need for support.

“We are encouraged by the (British) government backed loans that have been awarded to airlines and would once again ask that this kind of support be extended to international high-speed rail which has been severely impacted by the pandemic,” Eurostar said in a statement.

“Without additional funding from government there is a real risk to the survival of Eurostar, the green gateway to Europe, as the current situation is very serious,” it added in reference to trains’ lower emissions compared with planes.

Separately, the Department for Transport said it recognized “the significant financial challenges facing Eurostar as a result of Covid-19 and the unprecedented circumstances currently faced by the international travel industry.”

While it did not refer to the loans request, the department said it would continue to work closely with Eurostar over “the safe recovery of international travel.”

Eurostar is 55 percent owned by the SNCF, 30 percent by Canadian fund manager CDPQ, 10 percent by Britain-based fund Hermes Infrastructure, and five percent by the Belgian railway SNCB.

Business leaders in the United Kingdom have joined the call for the British government to financially rescue Eurostar.

In a letter dated Friday and sent to British finance minister Rishi Sunak, London First lobby group said Eurostar needed “swift action to safeguard its future,” or further harm Britain’s economy and environmental targets.

Signed by 25 executives and academics, the letter urged Britain’s Treasury and Department for Transport not to allow Eurostar to collapse. 

“If this viable business is allowed to fall between the cracks of support — neither an airline, nor a domestic railway — our (economic) recovery could be damaged.”

Fanichet last week said Eurostar passenger numbers were down 85 percent in 2020 from the year earlier and that the group was now “on a drip” in need of extra cash to prevent it from collapsing.

He added that the problem for Eurostar was that it was seen as French by the British government and as British by the French, meaning it had been difficult to secure bailout cash.

Prior to the pandemic, Eurostar had gradually been expanding its services, with new lines opened up from London to Amsterdam, the Alps, the south of France — in addition to the regular lines between Paris and Brussels.

The travel sector in Germany was also devastated by the coronavirus pandemic.

The operator of Frankfurt airport said yesterday that passenger numbers in 2020 plunged to their lowest since the 1980s.

Germany’s largest airport recorded 18.8 million passengers in 2020, a decline of 73 percent compared with the year before, Fraport said, hitting lows not seen since 1984.

Air traffic came to a complete standstill between April and June during the first coronavirus lockdown, “with weekly passenger figures plummeting by up to 98 percent year-on-year,” Fraport said.

Traffic at the hub recovered in the third quarter of 2020, but then fell again as restrictions intensified on a resurgence of the virus late in the year, the company said.

In December alone, passenger traffic was down 82 percent year-on-year to just over 890,000 people. “The year 2020 brought extreme challenges to the entire aviation industry,” Fraport chief executive Stefan Schulte said.

In the summer, the company said it would cut 3,000 to 4,000 jobs, or around 15 percent of its workforce.

The Fraport boss stressed that recent vaccination rollouts will lift the company’s fortunes, and he believes “Frankfurt’s passenger traffic will rebound noticeably in the second half of 2021.”

At the same time, he said he expects 2021 traffic to reach only 35 to 45 percent of 2019’s passenger numbers, in a “difficult year.”

Cargo traffic was a rare bright spot in 2020, Schulte said.

Freight dropped by just 8.3 percent.

Germany’s largest travel companies have been hardest hit by the health crisis.

Flag carrier Lufthansa and Europe’s largest tour operator TUI have been forced to tap multi-billion euro aid programmes from the German government to sustain them through the collapse in demand.

Shares in Lufthansa and TUI fell in morning trade yesterday on the back of tightening restrictions introduced on travel to Britain.

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