Eurostar on fast track to profit

EUROSTAR should be profitable within three years after a big jump in passenger numbers. Director Paul Charles said today that rising passenger numbers on the cross-Channel train service, falling charges paid to Eurotunnel and shorter journey times would bring profits sooner than expected.

The break into profit by the decade-old service will include the UK-based passenger operations, as well as the services between London and Paris and Brussels.

The company carried 7.27m passengers in 2004, a 15% increase on the previous year that lifted sales by 15% to £433m. Sales to UK business travellers rose 18.5%.

Charles said profitability will be enhanced from November 2006 when a minimum usage agreement, under which Eurostar pays about £200m a year to Eurotunnel for trains to pass under the Channel, expires. Payments are expected to fall by up to £40m a year.

Completion of the rail link between London and the Channel Tunnel in 2007 will cut journey times by a further ther 20 minutes. New stations will be opened at St Pancras, Stratford and Dartford.

With punctuality improved to 89.2%, the service clawed travellers from the airlines, achieving in its best month a 68% share of London-Paris traffic and 63% on the London-Brussels route.

BA ended its Gatwick-Paris service in November, and easyJet has reduced its London-Paris flights from five a day to three, although Air France has increased its service.