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Eurostar imitates airlines to stay on track

updated 11:24 AM EDT, Mon April 15, 2013
STORY HIGHLIGHTS
  • Eurostar, the high-speed train company, is undergoing a massive overhaul
  • With Nicolas Petrovic as its chief executive, it is trying to establish new routes
  • Petrovic says someday, travelers will think of train travel the same way they think of air travel
  • Eurostar faces future competition from Deutsche Bahn for travel through the Channel Tunnel

(CNN) -- Eurostar, the high-speed train company connecting London with Brussels and Paris, is undergoing a massive overhaul.

Its chief executive, Nicolas Petrovic, says a new fleet of trains will be ready by 2015, and to go with it, there will be new uniforms and new products. Recently a redesigned website was launched to make it easier for passengers to book trips.

But the real change over coming years will be a broadened destination network.

"We have this big program of expansion to re-energize the business, and based on that, we will be able to expand our business beyond our core routes," Petrovic says.

London, Brussels and Paris have long been the company's main stops, with every train going through the Channel Tunnel. To extend away from these routes, Eurostar first needs the fleet, Petrovic says, but the greatest challenge is economic: "How do we make money going to Holland, the South of France, anywhere -- the amount of money we have to pay to access the tracks?"

After existing as a partnership of three railway companies since its establishment in 1994, Eurostar only became a single corporate entity in 2010 -- the same year Petrovic became chief executive.

We want to bring to the railway the thinking of the airlines when they started to do hubs
Nicolas Petrovic, Eurostar

His track record has been encouraging; in 2011, the company turned a profit for the first time in its now 18-year history. And despite a rough economic climate in Europe last year, the company's profits doubled, its business given an extra boost by an increased number of passengers after the London Olympics.

Read more: China's high-speed rail dreams

The recent and upcoming changes are partly in anticipation of competition from Deutsche Bahn for train service through the Channel Tunnel, which Eurostar has monopolized until now. Deutsche Bahn has said it may start those operations in 2016.

Eurostar has already begun some new routes. A direct route that goes from London to Lyon and Provence in southern France will begin operations in May, while trains to the Swiss Alps began running last year.

Routes with busy air traffic, Petrovic says, offer high potential for Eurostar to grab market share. Other than journeys to Provence and the Alps, these popular flights include London to and from Holland and Germany.

Also taking a cue from air travel, Eurostar may partner with other services to broaden its network of routes. Petrovic says whether to partner up -- or not -- will be determined for each market.

"But we package it for the customers so they don't see the difference, and it's to try to bring to the railway the thinking of the airlines when they started to do hubs and spoke of connections between different airlines," he says.

Read more: Hotels aim to be offices of the future

Petrovic believes it will take years for people to think of train hubs and partnerships the same way they do for airlines, but he believes it will happen someday.

"It's a combination. You need to have the marketing right, the product right, the service right and to be a bit patient at times. But I really believe it is going to work," he says.

Eurostar has undergone other transformations in recent years. In 2010, it introduced a whole new travel class, called standard premier, which is priced between standard and business class. One of the target markets of standard premier are business travelers whose companies have tightened finances and put the brakes on pricy business class travel.

"We've got a business product, which is fantastic actually, but for many companies, the CFOs were saying 'no business.' So we created what they were looking for, and they are happy with it," Petrovic says.

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