On the Fast Track Eurostar Zooms into a New Era
London's swanky new St. Pancras rail terminal is likely to convert more airport-weary travelers to the hassle-free, cross-Channel train service.
The arrival of the high-speed Eurostar train, which runs from London to Paris, may signal the beginning of more high speed rail service in Europe.
Costing almost $12 billion and requiring 68 miles (109 km) of new track to link Britain's capital to the Eurotunnel, the project also entailed relocating Eurostar's London terminal from Waterloo International, on the south bank of the Thames, to the Victorian-era St. Pancras station in North London. The $1.6 billion renovation of St. Pancras includes a soaring new glass ceiling, 15 platforms for international and British train service, and a host of upscale amenities such as a champagne bar and a farmer's market.
The completion of the high-speed link comes as Eurostar is enjoying unprecedented success. Cashing in on a resurgent interest in train travel, the company posted third-quarter revenues of $308 million, up 13.8 percent, on passenger growth of 3.6 percent, to 2.23 million in the quarter.
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In part, that's due to the increasing hassle of airline travel. Unlike London's overcrowded and security-heavy airports, Eurostar passengers can check in just 30 minutes before departure and whisk through a thorough but speedy security check. Even more importantly, the new, high-speed track will cut the journey time to Paris to 2 hours and 15 minutes, down from as much as 2 hours and 45 minutes when high-speed tracks reached only half-way from the Channel to London.
The Green Factor
Eurostar also is banking on the growing concern over climate change to boost its business. Compared to a flight from London to Paris or Brussels, the company says, train travel produces one-tenth as much carbon emissions per passenger. To enhance its green credentials, the company is looking to further reduce CO2 emissions by 25 percent per passenger by 2012 through the introduction of more efficient trains.
To attract yet more business -- particularly to destinations beyond Paris and Brussels -- Eurostar is teaming up with other European railroad operators, including Germany's Deutsche Bahn and France's SNCF. Cooperation is still in the early stages, but the companies aim to let passengers book international trips through a one-stop Web site over the next few years. They have also earmarked $44 million to improve connections between their networks by 2009.
Such a link-up will pose a threat to the low-cost airlines that have sprouted up across Europe in recent years. "If their plans work, any journey under four hours could be up for grabs by the rail operators," says Mintel's Cope.
Rivals May Surface
But along with cooperation comes the threat of competition that could end Eurostar's current monopoly on passenger service through the Chunnel. Deutsche Bahn is contemplating offering new high-speed services between Germany and London, which could open the door for other European operators -- with their sizeable experience in high-speed train travel -- to break into the lucrative British rail market.
Until that happens, Eurostar can ride the wave of growing popular support for railroad travel between Britain and Europe. And with the opening of its new, multimillion dollar St. Pancras station, it looks like full steam ahead for Britiain's sole train operator to the European mainland.
Scott is a reporter in BusinessWeek's London bureau.