Eurostar International Ltd. said worries about the Brexit vote are fading as business bookings surge on trains linking London with Paris via the Channel Tunnel, led by the fashion, technology and creative sectors.
Corporate volumes rose 9 percent in the first quarter, Eurostar said on Tuesday, accelerating from a 4 percent gain in the initial 10 weeks. Demand from the financial services industry, the focus of speculation about jobs leaving London once Britain quits the European Union in 2019, is also buoyant, Chief Executive Officer Nicolas Petrovic said in an interview.
“We are ahead of our targets,” Petrovic said after revenue increased 15 percent to 232 million pounds ($300 million) in the three months. “The economy in the U.K. has been pretty robust compared with what was feared, and the French economy is doing very well. There is a sense of normality. Our customers were a lot more worried last year.”
Eurostar had a 25 million-pound loss in 2016 as its passenger tally fell 4 percent amid a spate of terrorist attacks that targeted cities including Paris and Brussels, two of its three main terminals. The company also cut London frequencies following the Brexit vote, but with U.K.-originating traffic so strong some services are now being added at weekends. While there’s “still a lot of uncertainty,” Petrovic said he’s working on the premise that a even so-called hard Brexit would slow growth rather than shrink the market.
The election of Emmanuel Macron as French president should provide stability and is positive for business, according to the CEO. While Macron vowed in his campaign to renegotiate the Le Touquet accord allowing U.K. officials to carry out border checks in France, the CEO said the issue is of limited concern. The agreement is an intergovernmental pact, not an EU treaty, and shouldn’t be affected by Brexit, he said, adding that Eurostar will cope if it is, having previously had border controls at London Waterloo in its early years.
“Let’s wait and see,” Petrovic said. “I’m not worried because we are working a lot on the topic with the correct officials. It’s a purely political issue. But the officials on the ground understand what we do. Nobody wants the service to stop on day one in 2019.”
The use of facial-recognition screening is also easing concerns, with the technology introduced in Lille and due in Brussels.
American tourists are continuing to return to Europe as anxiety about terrorist attacks eases and the strong dollar reduces travel costs, with the number of U.S. customers up 13 percent in the first quarter as overall passenger numbers rose 2 percent. Asian visitors are also coming back, with Eurostar featuring in the itineraries of tour groups from Japan, China, South Korea and India.
Plans to introduce the first trains from London to Amsterdam before the end of this year are on schedule, Petrovic said, with work focused on station infrastructure and establishing the safety case of new e320 trains on Dutch track. There will be two return services a day, with a stop at Rotterdam but not in Antwerp, which can’t currently incorporate required immigration facilities.
Eurostar has so far taken delivery of 13 e320s from Siemens AG, with the remainder of the 17-strong order due to arrive over the next 18 months. While a batch of the company’s original e300 trains will be retained, with three or four already refurbished, many of the 27 units will be scrapped and two or three have already left the fleet, Petrovic said.
–With assistance from Guy Johnson
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