Renfe wants to operate on the Paris-London high-speed line through the Eurotunnel, and has already started the initial contacts to be able to compete with Eurostar and has requested the Ministry of Finance for permission to circulate in the corridor, sources informed EL PAÍS sector. The Eurotunnel, which has crossed the English Channel since 1994, allows travel from France to the United Kingdom by private car (on a shuttle train) or by the Eurostar high-speed train.
The interest of the Spanish public company to operate in this corridor occurs because there are currently available paths (road use permits) and the capacity to operate on the High Speed line, which is managed by the French-British company Eurotunnel, and due to the high demand that is expected for this route that joins the two European capitals. The Paris-London market is used annually by nine million travelers (2019 data), of which seven million use the Eurostar train, which connects Paris and London in approximately 2 hours and 12 minutes.
In addition, Renfe’s request also comes after the problems suffered by the Spanish railway operator to operate on the Paris-Lyon-Marseille line, the busiest in France, both from the French regulator, the Autorité de Régulation des Transports (ART) as well as the SNCF, the French Renfe, reported the cited sources.
Renfe’s initial intention was to operate this corridor, but it has not been able to obtain the necessary certifications or approvals, due to the continuous obstacles it has encountered in accessing information on the infrastructure or technical specifications that the equipment must meet. signaling, and the impossibility of carrying out tests with its AVE trains.
These impediments collide with the facilities given to SNCF in Spain so that it could disembark in Spain with its high-speed and low-cost Ouigo trains, which have been operating the Madrid-Barcelona line since last May in competition with Renfe. For this reason, the Spanish public company has decided to try its luck in the Paris-London corridor, in which the circulation permits and approvals depend on Getlink (current name of Eurotunnel) and the British manager HS1, and not the French regulator.
The corridor that crosses the English Channel was of high traffic and was in continuous growth until the stoppage due to covid-19 and Brexit, a trend that is expected to recover next year. According to the demand analysis carried out, it would be viable and profitable for Renfe to compete with Eurostar. In this way, Renfe’s access to France would be easier, due to the support of HS1 and Getlink, which is listed on the Stock Exchange, both well positioned in France and very interested in the development of the project. Getlink made a profit of 156 million euros in 2019, although in 2020 it suffered losses of 113 million due to both Brexit and the stoppage due to the coronavirus.
The high-speed services in the Eurotunnel are currently provided by the operator Eurostar International Limited (EIL), majority owned by SNCF (55%), it earned 100 million euros in 2019, although after the pandemic it was about to request the rescue the French Government.
Seven own trains
Renfe’s objective is to operate with its own product, for which the first step would be the homologation of the trains. The business plan foresees the use of a minimum of seven units, and it is estimated that the return on investment would take place in the fourth year, according to the same sources. In a second phase, the service could be extended to new French and international destinations. In addition, operating between London and Paris would have a great reputational impact for Renfe at the international level.
However, and in parallel, Renfe will continue to negotiate with the French authorities the permits to operate the Paris-Lyon-Marseille line with the AVE and operate commuter services in the Great East and Haute-France regions. The former Minister of Transport, José Luis Ábalos, already had to send his French counterpart and the European Commission letters demanding that the rules that allow competition be applied, as has happened in Spain since December 2020.
The current president of Renfe, Isaías Táboas, included internationalization as one of the fundamental ways of growth in the last strategic plan, with the objective that in ten years foreign revenues represent 10% of the total billing of the railway operator. In addition to managing the high-speed line between Mecca and Medina in Arabia, Renfe is interested in the corridor between Dallas and Houston and in the Mexican Mayan Train. His latest move in the international sphere has been the takeover of 50% of the capital of the Czech Leo Express, which offers licenses and resources to act in the Czech Republic, Slovakia, Poland and Germany.
Results up to September
On the other hand, Renfe recorded losses of 277.8 million euros in the first nine months of the year, which represents an improvement of 16.5% compared to the ‘red numbers’ of last year, although it is still far from the profit of 69.2 million euros that was recorded in the same period of 2019, before the outbreak of the coronavirus crisis.
However, the latest quarterly results show a gross operating result (Ebitda) of 19.8 million euros for the public company, making it the first time since the start of the pandemic that Renfe has recorded an operating profit. In contrast, until September 2019 the Ebitda was 366.4 million euros.
The increase compared to last year is mainly due to the increase in passengers -14.5% higher, up to 226 million passengers- and freight transport -11.7% more-, data that confirm the progressive recovery of normality. The railway company’s revenue reached 2,288.7 million euros between January and September, 151 million more (+ 7.1%) than in the same period last year.
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