Eurostar ‘cannot be allowed to collapse’ says Irish MEP
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The UK Government was asked to play a greater role to guarantee Eurostar’s long-term future following the increasing uncertainty for international travel. But ministers said Eurostar’s shareholders must “fully exhaust all options” to protect its future.
It comes after the cross-Channel rail operator announced it had secured a £250 million rescue package.
The rescue package announced last month consisted of £150 million of loans guaranteed by shareholders, £50 million of additional equity from shareholders, and the restructuring of £50 million of existing loan facilities.
But Paris is concerned about the UK’s position and has called on ministers to commit to a guarantee of funding, following a second indication of no help.
The French Government, which owns 55 percent of Eurostar through State-owned railway operator SNCF, said the UK “had a responsibility” to help Eurostar through the crisis.
They added: “The UK has a responsibility to help, it can’t keep saying no.”
Chiefs warned Eurostar was “fighting for its survival” due to the COVID-19 pandemic causing a huge drop in passenger demand.
Mr Damas added: “Since the start of the pandemic, our turnover has been divided by twenty on average.”
But he stressed the £250m funding was an “oxygen balloon” that could allow the company to survive until Spring 2022.
The UK sold its Eurostar stake to private companies for £757 million in 2015, and have hinted it not their responsibility to bail out the cross-channel operator, which provides services between London, Paris, Brussels and Amsterdam.
Speaking in the House of Commons, Transport Minister Robert Courts added: “The department fully expects Eurostar will continue to be a highly successful, profitable company carrying record passengers once international travel recovers.
“The Government welcomes the recent announcements from the company, its shareholders and lenders regarding a new financing package.
“We will continue to engage with Eurostar to fully understand the company’s position but we would expect shareholders – including the majority shareholder SNCF, the French state-owned railway – to fully exhaust all options and to play their full part.”
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Mr Court’s comments come after Manchester Withington MP Jeff Smith quizzed the minister about Eurostar’s finances in the Commons.
The Labour MP added: “The minister knows there’s been a real threat to Eurostar’s survival and British business leaders and the Transport Select Committee chair all called for our Government to be part of the solution.
“Eurostar isn’t just a vital service but contributes to our net zero agenda.
“So when we’re in a climate crisis as well as a Covid crisis, does the minister think it’s right the Government should be giving billions in loans and guarantees to air travel but risk Eurostar going under?”
Eurostar this week announced plans to increase its London-Paris services by the end of June by three times daily.
The third service will run Monday to Saturday inclusive effective from June 28th.
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