Eurostar sees record traveller levels in Q1 2018 as more people take to the railway, but is it at the expense of the airlines?

Eurostar, the high-speed passenger service connecting the United Kingdom and mainland Europe, has reported a strong performance in the first quarter of 2018 with record Q1 passenger volumes. Sales revenues grew by 9% year-on-year (GBP253 million versus GBP232 million in Q1 2017) while passenger numbers increased by 4% from 2.27 million to 2.36 million.

The results highlight that the positive momentum reported last year has continued into 2018 underpinned, according to the train operator, by a further increase in the number of US travellers as well as growth in the business market. Over the first three months of the year the number of passengers from the US rose by 27%, while its volume of business customers grew by 6% year-on-year.

The strong operational and financial performance comes as the service makes its milestone expansion into new markets. Earlier this month Eurostar launched a new service from London St Pancras to Amsterdam and Rotterdam in the Netherlands offering its first links between the UK and the Netherlands.

Mike Cooper, chief executive of Eurostar says the new route “has met with an enthusiastic response and demand is strong,” and adds that customers have welcomed the service as a “compelling alternative to the airlines”.

In the latest in a series of innovations, Eurostar is now also offering travellers access to a range of hand-picked hotels with special rates and benefits for its customers. It says the collection has been curated to provide passengers with city-centre hotels across all price-points, grouped in different themes from design gems to gastronomic hot-spots.

There is always a debate about ‘aeroplane versus train’, but despite strong Low Cost Carrier (LCC) competition between the UK and mainland Europe, Eurostar has been able to generate strong local traffic flows and a complementary as well as competitive offer to airlines. While, mainline hub airlines such as Air France, British Airways and KLM will still be the natural choice for those transferring via Paris, London and Amsterdam, respectively, the high-speed train option has become a compelling alternative for point-to-point passengers.

Since Eurostar inaugurated service between London and Paris in 1994 the market between the two cities has more than doubled. This has been via a mix of organic growth and market stimulation. The London – Amsterdam market is a similar scale today as London – Paris was when Eurostar was launched so the potential is significant.

The Blue Swan Daily analysis of UK Civil Aviation Authority (CAA) data last year showed that annual air traffic demand between London and Paris fell by more than 43% since Eurostar made its debut in 1994 from just over 4.0 million passengers then to just 2.25 million in 2016. Since its inauguration, the train operator says its fleet of 28 trains has carried more than 150 million passengers between London and the Continent.

So has Eurostar’s success in Q1 2018 come at the cost of airlines? Well, another look at UK CAA data for the first month of this year (latest full month of reports) delivers mixed messages in the largest markets served by Eurostar. In Jan-2018 air passenger demand between London and Paris was down -5.3% versus Jan-2017, but traffic between London and Brussels was up +10.6%.

There are far too many parameters to coherently answer the ‘Plane versus Train’ debate, especially for routes over distances such as from London to Amsterdam, Brussels and Paris. Whether it is environmental versus financial versus convenience considerations it can simply just come down to where Point A and Point B are as to which is the faster form of transport.

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