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Rail expansion plans bring fractured Europe closer together

By CNN wires
updated 1:08 PM EDT, Thu September 5, 2013
STORY HIGHLIGHTS
  • Eurotunnel shuttles 400 trains a day through the Channel Tunnel on average
  • Gounon said the company negotiated with Britain and France to expand its footprint
  • Last year, the Paris-based company launched a ferry service called MyFerryLink for large vehicles and passengers

(CNN) -- While UK politicians seek to distance themselves from Europe's troubled continent, rail operators are doing their best to bridge the gap.

The Channel Tunnel -- a favored travel route for those flitting between London and Paris -- is expanding its reach into mainland Europe by opening its doors to Deutsche Bahn.

The German operator's access to the Channel Tunnel upsets the monopoly held on the route by high speed train operator Eurostar since 2004, and will boost traffic by 4 million passengers.

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Jacques Gounon, chief executive of Eurotunnel -- the company that operates the Channel Tunnel -- told CNN the company was recovering from the crisis, when traffic fell by 20%.

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"Now it's up year after year at 3 to 4% gross rate," Gounon said. "Deutsche Bahn will come from Germany and Netherlands... it's quite clear that this will be an incredible increase in our revenue."

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Deutsche Bahn will shuttle passengers to major destinations in Europe such as Frankfurt, Cologne and Amsterdam. The Eurostar offers links between London, Calais and Paris.

Gounon said the company negotiated with Britain and France to expand its footprint and "explain that there is available capacity within the tunnel."

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He said: "We have the knowledge and the skills in order to manage the different slots between our own shuttles, Eurostar slots and the future Deutsche Bahn trains, and that this will be good for customers between the continent and Great Britain."

Eurotunnel has 400 trains a day through the Channel Tunnel on average, with 52 of these being high-speed rail.

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It's quite clear that this will be an incredible increase in our revenue
Jacques Gounon, chief executive of Eurotunnel

Deutsche Bahn will begin its undersea rail operations as soon as the Intercity Express trains -- manufactured by German technology company Siemens -- are ready for service.

The move will break Eurostar's near-two decade dominance over the Channel Tunnel, but the high-speed operator is making expansion plans of its own.

Speaking to CNN last month, Eurostar CEO Nicolas Petrovic said the company is planning to launch a "state of the art" fleet that can carry passengers to the Netherlands, Germany and Switzerland.

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Petrovic said Eurostar would "grab the opportunity of open access in Europe" while trying to wrestle market share from airlines.

Eurostar tickets for an adult traveling from London to Paris cost £69 ($104) for standard class to £250 ($378) for business class.

Petrovic told CNN that the company is looking "very carefully" at pricing, adding that the biggest cost to Eurostar's business is the levy on using the Channel Tunnel.

Meanwhile, Eurotunnel is expanding more than just its train business.

Last year, the Paris-based company launched a ferry service called MyFerryLink, for large vehicles and passengers who prefer to travel by boat. The business has already gained 11% of the market share, according to Eurotunnel.

Gounon said: "People who want to have a different way to cross the Channel, perhaps to pay less... We believe that the ferry business is a compliment of our main core business."

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