Thalys and Eurostar: loans for restart and merger by end of the year
To keep their heads above the water, high-speed train companies Thalys and Eurostar seek outside help and (probably) each other’s company.
While the latter already received a 290 million euro loan last week, Thalys realized the first external financing of its history, with 120 million euro from five banks. Furthermore, the two companies could merge in the future to increase synergies and reduce costs.
With the Covid-19 pandemic, 2020 was a dark year in the history of rail passenger transport. Thalys, the high-speed train service connecting France, Belgium, the Netherlands, and Germany, saw its turnover drop by 70%, suffering a net loss of € 137,7 million.
To bring a breath of fresh air to Thalys’ bank account, the French-Belgian company owned by the SNCB/NMBS (40%) and the SNCF (60%) received a four-year loan of 120 million euro from five European banks.
According to the CEO, Bertrand Gosselin, this amount will help secure the company’s future in a difficult context comprised of travel restrictions lifting and gradual activity recovery.
Eurostart at a standstill
For its part, Eurostar, the rail company connecting London to Europe via the Channel tunnel line, is also swimming in deep waters. The number of passengers dropped by 95% since the first lockdown. Instead of the thirteen daily trains, only one Eurostar leaves London’s St-Pancras every day.
To add insult to injury, the post-Brexit British government adopted an international-first policy, leaving Europe to one side. Eurostar – owned at 55% by the SNCF, 5% by the SNCB/NMBS, and the rest by private British funds – won’t receive any help from Her Majesty’s government.
As a last hope, Eurostar announced a 290 million euro financing agreement last week to avoid its imminent bankruptcy.
Towards Eurostar-Thalys merger
French SNCF had already uttered the idea of a fusion between the two rail companies in autumn 2019. Voyages SNCF’s managing director, Alain Krakovitch, hopes to merge Eurostar and Thalys by the end of the year.
While it has been postponed, the merger could help both companies out. Stronger together, they could find as many synergies as possible to spare the little money they’ve got left. Nothing is said in terms of employment, as Eurostar is based in the UK and employs around 1 200 people, not counting sub-contractors.