Wednesday, 9 April 2008

Finally, the chunnel turns a profit

Here’s an interesting item from Euronews today. It seems that at long last the chunnel has turned a profit! Eurotunnel, the operator of the underwater train tunnel linking Britain to continental Europe, has made a profit for the first time since it opened in 1994.

Back then the cost of building the tunnel ran so over budget that the company has been paying off the massive debt ever since. And of course they were not helped by the fact that at the same time there was an explosion of budget airlines taking people from London to the continent for next to nothing. Ridership didn’t meet expectations, and over the past few years it looked like the company was headed for bankruptcy. It lost €204 million in 2006 and €2.8 billion in 2005.

It was a daunting task to turn it around but somehow they seem to have done it. Chief executive Jacques Gounon has managed to strictly cut operating costs and complete a financial restructuring that has lowered the company’s level of debt and therefore its interest payments.

But an increase in ridership can be mainly credited with bringing the company into the black. Ridership has increased significantly over the past year – and I hope my several journeys on the Eurostar during that time has helped to bring that number up! My guess is that the increase is the delayed benefit of people growing increasingly frustrated with air travel as security and immigration procedures have been tightened over the past six years. In addition, the increasing concern over global warming in the UK and the emphasis on airplane emissions by the British media has most likely motivated people to hop on the train. It may be more expensive to take the Eurostar to the continent rather than Easyjet or Ryanair, but the extra cost is easily worth it for the convenience of leaving from and arriving at a city centre, a guarantee that the train will be on time, wider more comfortable seats and the good feeling that comes with helping to reduce greenhouse gas emissions.

Incidentally it is possible to get good Eurostar rates if you book way in advance. The company doesn’t advertise this on the main page of their web site for some reason, but in the depths of the interwebs you can find this page where you can find £55 round-trip tickets to Paris, Brussels or Lille. For weekend trips you need to book about three months in advance, but if you’re leaving and coming back during the week you can easily find the discount tickets just a few weeks before.

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