Eurostar seeking financial aid

[Derekstuart]

EDIT: Deleted. I knew as soon as I pressed enter that I'd regret it.

 

 

Edited January 24, 2021 by Derekstuart

[melmerby]

Let's clear some things up

HS1 has not been sold, it is still owned by HMG but an investment group from Toronto has taken a 30 year lease on it. They do not get the freehold. It reverts to HMG in 2040

Eurostar own their own trains but (in the UK) run on tracks owned by UK but leased out to third party see above.

Heathrow is mainly owned by Ferrovial which is based in Madrid.

Gatwick is French, Abu Dhabi, California & South Korea owned (The French have a 50.1% stake.)

 

Trying to single out Eurostar as "Foreign -nothing to do with us" doesn't wash when we are supporting foreign TOCs and Foreign airport owners.

 

[chrisf]

There is another reason for Eurostar's current woes.  The latest issue of Modern Railways reports on changes brought about as a consequence of Brexit.  The gist of it is that the EU has imposed "third country status" on all UK travellers.  From 1st January all British travellers must have their passports stamped every time they cross the Schengen border.  Eurostar now advise travellers to arrive 75 minutes before departure time.  However, the UK Government still allows EU citizens to use automatic gates: records of entry and exit for them will continue to be recorded electronically rather than by passport stamp.  Unless this anomaly can be cured by further negotiations it could lead to travellers finding that the extra time spent at stations removes any competitive advantage of Eurostar over flying.  On top of that, customs checks are now to be carried out at arrival stations as well as on departure.

 

Chris 

[Pandora]

It seems the UK is already supporting Eurostar by the Job Retention Scheme, with such low passenger ridership, only 10%  seat occupancy  on the one service per day timetable as reported elsewhere, would it not be easier and less costly to suspend the last remaining daily service, then simply mothball the stock?

"Details of Eurostar UK proposals to unions -
Furlough
We have great confidence that the business will fully recover, but we now need to take some difficult short term actions to help us navigate through this uncertain period.
We have seen some drastic measures in the travel industry to cut costs, particularly in the airline industry. The UK government has announced that it will basically suspend rail franchises for a period of six months and take on any losses, unfortunately we are not a TOC, we are a private company that does not have access to that protection. We do continue to push both the French and UK governments and we are working hard with our banks to reshape our finances to support us during this difficult period.
· As discussed, passenger numbers have decreased dramatically over the past few weeks to the extent that we are now only planning to run 1 return service to Paris and Brussels per day. Due to logistics these will be manned by UK crews.
· At this time, we do not require the majority of our employees, so from 6 April 2020 we will be asking up to 80% of our employees to be placed on furlough for a period of 12 weeks from 6 April 2020.
-We need to take these measures to ensure the long-term protection of our employees and the success of the business, but believe we are proposing a short-term solution which is fair and equitable for all employees.
· We will pay all furloughed employees 80% of their normal basic salary, subject to tax, NI, and other normal deductions for 12 weeks (Holiday accrual and continuous service will apply) from 6 April 2020.
· For non-frontline areas we have requested that the relevant Directors identify those employees who will be necessary to ’keep the lights on’ during the period, in terms of planning, compliance, safety, people, etc.
· We will consider rotating employees on a 4 to 6 week basis, to attempt to minimise the amount of furloughed time an employee may need to take. Subject to the guidelines of the Government Retention Scheme.
· We will continue to review activity during April 2020, particularly in the non-frontline areas, with a review of placing additional employees on furlough if their activity diminishes. Also, we will review any potential upsurge in activity where we require greater employee presence.
· Eurostar will seek to retrospectively reclaim government funding via the Government Retention Scheme, in order to recoup up to £2,500 per employee, per month.
Gerard Jacques
Director of People
Eurostar International Limited"

[Pandora]

Reported by Bloomberg:
 

Quote

 

British Transport Secretary Grant Shapps said options including the Bank of England’s coronavirus loans and the U.K.’s export finance regime could be available to help London-based Eurostar, which operates a passenger-train link with the continent. But he insisted that the primary responsibility for the bailout remains with France, which controls the company via state railway SNCF.

“You’ve got 55% ownership by the French state so it’s not just any old shareholder, it’s a state-backed shareholder,” Shapps told the U.K. Parliament’s transport committee on Wednesday. “We will look to be as helpful as possible.”

 

 

A tough line being taken, UK is not a soft touch for the gnomes  of Brussels.

Edited February 3, 2021 by Pandora

[phil-b259]

6 minutes ago, Pandora said:

Reported by Bloomberg:
 

 

A tough line being taken, UK is not a soft touch for the Gnomes  of Brussels  or the French economy.

 

Anyone else get a whiff of the 'Government ownership = always bad, flog it off to private sector for a quick buck and damn the long term consequences' about Mr Shapps comments?

[Pandora]

No, i hear  it is your baby, you change the nappy

Edited February 3, 2021 by Pandora

[hayfield]

1 hour ago, phil-b259 said:

 

Anyone else get a whiff of the 'Government ownership = always bad, flog it off to private sector for a quick buck and damn the long term consequences' about Mr Shapps comments?

 

Are they not being helped like all other firms with the furlow scheme ? 

[phil-b259]

10 minutes ago, hayfield said:

 

Are they not being helped like all other firms with the furlow scheme ? 

 

Thats not what I was alluding to.

 

Yes, Eurostar may be a French company and yes, on a strictly commercial* level it is the responsibility of the French Government to deal with - but why the quip about the French state holding a 55% stake? Who owns the shares is irrelevant to the the content of the message he was imparting (namely its down to the country the company is headquartered in to provide assistance**) and as such it strikes me Mr Shapps is trying to insinuate that the large state shareholding is part of the problem or related to why extra assistance won't be provided.

 

 

 

*In my view there is absolutely nothing wrong with the state retaining a large shareholding in what we may traditionally think of as 'private companies'. Having a large Government stake in such companies is not the same thing from Whitehall (something some on certain parts of the political spectrum fail to understand) but it does provide a nice steady a long term income to Government coffers that will in time add up to far more than the revenue gained by a one off sale of said shares. Moreover it allows Governments to intervene and potentially stop situations which could be detrimental to ordinary people (as opposed to hedge funds and city share traders) who facilitated the hostile takeover of Cadbury and a large number of job losses when the new owners closed UK plants.

 

**More widely however there is such a thing called climate change going on and Eurostar, like all rail operators are an integral part of the strategy to combat that. As a result the UK has a moral responsibility to ensure the Eurostar operation doesn't just 'survive' - it must be in a position to respond as soon as Lockdown restrictions get eased and that won't happen if we rely on the 'free market' to take the lead.  It is not a simple question of who owns the company - the service it provides is far more than just a train service, its an essential part of the UKs moral responsibility to drive down climate emissions in a way that propping up the overseas companies that own our polluting airports and polluting airlines are not. Consequently it is my view that Eurostar (along with Hull Trains and Grand Central) are deserving of more than just Furlough payments. Additional assistance (subject to a way of recovering that investment in future years - say through taking on a shareholding in the company) should be provided by the UK Government regardless of who 'owns them'

 

 

[phil-b259]

On 27/01/2021 at 14:55, Pandora said:

It seems the UK is already supporting Eurostar by the Job Retention Scheme, with such low passenger ridership, only 10%  seat occupancy  on the one service per day timetable as reported elsewhere, would it not be easier and less costly to suspend the last remaining daily service, then simply mothball the stock?

 

 

If money was the only thing at play then  yes obviously what you say would be the choice.

 

However, as I keep having to remind British people money is not the be all and end all of everything.

 

Although the Pandemic has halted most travel - there are still some people who do NEED to travel between countries. This includes some officials engaged in post Brexit UK - EU relations, persons involved in science or technical disciplines where working from home is not an option.

 

Climate change does not respect a Pandemic and although pollution has reduced significantly due to the airline industries woes, that does not mean we should completely abandon what remains the most environmentally friendly way of travelling between the UK and EU. Its well known that once people go back to using cars for travel it is an uphill challenge for rail to win them back - the same is true of airlines, particularity if they start offering cheap fares again to try and drum up demand. Use of Eurostar (as opposed to flying) should still be encouraged for those that have to travel and the cessation of the service (even if temporary) sends out completely the wrong message as well as making the ramp up of services again when things improve even more of a challenge.

 

 

 

[phil-b259]

2 hours ago, Pandora said:

No, i hear  it is your baby, you change the nappy

 

Except it isn't the French's baby when it comes to meeting the UK's obligations to climate change is it?

 

The UK has a moral obligation to promote Eurostar as over the polluting business of flying when travelling to the continent and that obligation is a generations long one - unlike this Pandemic .

 

Thus while from a purely financial point of view it might well be a French requirement to change the dirty nappy, ensuring the baby doesn't develop sores from the unchanged nappy being left on for too long is a UK responsibility too and this nonsense of ascribing responsibility solely based on share ownership should stop.

[Dava]

Britain is a declining branchline economy off the European landmass. It is likely to lose its vestigial train service to its main market. No longer a commercially attractive proposition.

 

Who wants to come to Plague Island run by a nasty corrupt regime of red tape bureaucrats who make travel and trade as difficult as possible?

 

We may look back on the period from 2008 to 2020 as a Golden era of free movement by international rail travel from St Pancras International.

 

Dava

[Zomboid]

Eurostar exists solely to connect the UK to Europe. It doesn't facilitate any journeys that don't start or end in the UK. As such, regardless of ownership, I don't think the UK can just wash it's hands of it.

[Ron Ron Ron]

Eurostar is being merged with Thalys, with the joint enterprise being largely focussed on European mainland connections.

It remains to be seen if the Eurostar brand is retained as a separate entity, or whether that branding will be adopted across the company.

There’s little written about the plans in the public domain.

The cross channel services will just become one branch of the joint operation.

 

.

[hayfield]

9 hours ago, phil-b259 said:

 

Thats not what I was alluding to.

 

Yes, Eurostar may be a French company and yes, on a strictly commercial* level it is the responsibility of the French Government to deal with - but why the quip about the French state holding a 55% stake? Who owns the shares is irrelevant to the the content of the message he was imparting (namely its down to the country the company is headquartered in to provide assistance**) and as such it strikes me Mr Shapps is trying to insinuate that the large state shareholding is part of the problem or related to why extra assistance won't be provided.

 

 

 

*In my view there is absolutely nothing wrong with the state retaining a large shareholding in what we may traditionally think of as 'private companies'. Having a large Government stake in such companies is not the same thing from Whitehall (something some on certain parts of the political spectrum fail to understand) but it does provide a nice steady a long term income to Government coffers that will in time add up to far more than the revenue gained by a one off sale of said shares. Moreover it allows Governments to intervene and potentially stop situations which could be detrimental to ordinary people (as opposed to hedge funds and city share traders) who facilitated the hostile takeover of Cadbury and a large number of job losses when the new owners closed UK plants.

 

**More widely however there is such a thing called climate change going on and Eurostar, like all rail operators are an integral part of the strategy to combat that. As a result the UK has a moral responsibility to ensure the Eurostar operation doesn't just 'survive' - it must be in a position to respond as soon as Lockdown restrictions get eased and that won't happen if we rely on the 'free market' to take the lead.  It is not a simple question of who owns the company - the service it provides is far more than just a train service, its an essential part of the UKs moral responsibility to drive down climate emissions in a way that propping up the overseas companies that own our polluting airports and polluting airlines are not. Consequently it is my view that Eurostar (along with Hull Trains and Grand Central) are deserving of more than just Furlough payments. Additional assistance (subject to a way of recovering that investment in future years - say through taking on a shareholding in the company) should be provided by the UK Government regardless of who 'owns them'

 

 

 

 

Eurostar is a train operator, not Eurotunnel so if it goes bust someone else will pick up the pieces, as I said we are spending millions with Furlow. The effect on climate change is a red herring as few are flying, its up to Eurostar to make inroads into air transport, but there is insufficient capacity with the tunnel plus also not enough demand. Also too few interconnecting services that are able to tap into Eurostar. In Europe with the exception of Garde du Nord you can easily change platforms from TGV to local lines.

[hayfield]

8 hours ago, Dava said:

Britain is a declining branchline economy off the European landmass. It is likely to lose its vestigial train service to its main market. No longer a commercially attractive proposition.

 

Who wants to come to Plague Island run by a nasty corrupt regime of red tape bureaucrats who make travel and trade as difficult as possible?

 

We may look back on the period from 2008 to 2020 as a Golden era of free movement by international rail travel from St Pancras International.

 

Dava

 

What a jaundiced view, agreed we have just come through a period of uncertainty, then hit with covid. But foreign companies are starting to come here, recent massive commitment by a Japanese company. The covid vaccine has shown how nimble our companies can be, plus a lot of increased pharmaceutical activities have been built up all desperatly needed world wide.

 

 

[Pandora]

I'm in regular contact with an old friend in Paris, tells me the situation for the French economy is dire,  the mishandling by Brussels of their  vaccination programme is the cause. Long before the French population is vaccinated , Eurostar will have run out of money and folded. Money from UK to Eurostar would be  wasted,  Brussels, being the major cause of the delay for French vaccination and a delayed return to normality, should be bridging the  cash flow deficit in the interim.  

Edited February 4, 2021 by Pandora

[Ron Ron Ron]

Notwithstanding the EU's totally botched vaccination programme, travel restrictions and a much reduced demand for travel will seriously affect Eurostar and other continental high speed rail services for the remainder of 2021.

This isn't being helped by the high number of people who are wary, or even opposed to having a vaccine in countries like France.

All of this doesn't bode well for any of the travel industry, rail included.

Thalys, Eurostar's new partner, is also in difficulty and both will run out of money soon.

 

Maybe the merger will have to be deeper than some may have anticipated, to combine the losses and find the most efficient way forward, as we start to come out of various national lockdowns over the next year.

How long lasting the economic damage will be for the industry is anybody's guess.

 

 

.

Edited February 4, 2021 by Ron Ron Ron

[phil-b259]

5 hours ago, Zomboid said:

Eurostar exists solely to connect the UK to Europe. It doesn't facilitate any journeys that don't start or end in the UK. As such, regardless of ownership, I don't think the UK can just wash it's hands of it.

 

And presumably you also think the UK can wash its hands of any responsibility to address climate change then by posting such a cavalier and self centred message.

 

You don't get it do you - this is not about the future of a company - its about the future of the planet for generations to come.

 

Rail is far kinder to the planet than motor transport or flying.

 

This Pandemic will end eventually! and as such its vitally important companies like Eurostar are there to rapidly respond when demand picks up again - because you can bet airline and airport owners will be doing their level best to hoover up all travellers.

 

I repeat this is not a call for some sort of Corbinite / RMT wet dream where Eurostar gets renationalised - its about the UK taking some responsibility to ensure Eurostar as a service is still there in 6 to 12 months time. Taking a modest shareholding in exchange for cash is a perfectly reasonable way of providing additional support that provides the taxpayer with a way of recouping their investment in the future while at the same time showing real commitment to our Climate change obligations.

 

Edited February 4, 2021 by phil-b259

[phil-b259]

2 hours ago, hayfield said:

 

 

 The effect on climate change is a red herring as few are flying, its up to Eurostar to make inroads into air transport, but there is insufficient capacity with the tunnel plus also not enough demand.

 

No its not!

 

The UK Government has an obligation under climate change accords to push environmentally friendly travel methods and a global pandemic DOES NOTHING to change that obligation.

[phil-b259]

56 minutes ago, Pandora said:

I'm in regular contact with an old friend in Paris, tells me the situation for the French economy is dire,  the mishandling by Brussels of their  vaccination programme is the cause. Long before the French population is vaccinated , Eurostar will have run out of money and folded. Money from UK to Eurostar would be  wasted,  Brussels, being the major cause of the delay for French vaccination and a delayed return to normality, should be bridging the  cash flow deficit in the interim.  

 

Which is why you don't just hand them cash - you invest in assets.

 

If a shareholding is considered to risky then taking stake in the trains themselves may be a better move as they are going to be needed  even if Eurostar itself goes bust and someone else takes over*. Given the UKs love of complex financial arrangements then I'm sure those city advisors the Government love so much could come up with something.

 

*Note letting the service simply die would be a prime case of obsession with money and any UK person who thinks that is an acceptable future for the UK when we KNOW how much damage flying and driving to to our climate should hang their head in shame. The Pandemic may have been devastating in the short term - but it WILL end, climate change on the other hand is not so easily dealt with!

[Zomboid]

21 minutes ago, phil-b259 said:

And presumably you also think the UK can wash its hands of any responsibility to address climate change then by posting such a cavalier and self centred message.

 

You don't get it do you - this is not about the future of a company - its about the future of the planet for generations to come.

Eh? I think you might have misunderstood me. I said that I think the UK *can't* wash it's hands of Eurostar.

[phil-b259]

11 minutes ago, Zomboid said:

Eh? I think you might have misunderstood me. I said that I think the UK *can't* wash it's hands of Eurostar.

 

Ahh in which case I apologise.

 

 

Like I said I'm not calling for Eurostar to be given wads of cash without some form of security the UK will get it back over the coming decade, its the attitude of "Its a French company so we can chuck it to the wolves" which I object to.

 

Rail operators be they domestic or international, freight or passenger ALL deserve UK Government support to keep functioning and most importantly still be there as travel restrictions are eased in line with our obligations to the planet. Exactly what form that support takes is of course subject to debate and it does not mean simply writing blank cheques with no payback measures in place.

 

Polluting airlines and airports on the other hand do not qualify for the same - particularly as a look at the past 50 years shows they are quite capable of attracting custom on their own.

[Michael Hodgson]

Is this thread a private argument or can anybody join in?

[Ron Ron Ron]

30 minutes ago, phil-b259 said:

.....its the attitude of "Its a French company so we can chuck it to the wolves" which I object to......

 

A fair point Phil, but (playing devil's advocate for a moment) if it was the other way around, with Eurostar being 60, 80 or 100% UK owned, do you think the French government would be prepared to help bale them out?

 

 

 

.