Short-haul planes are being railroaded by trains' success
Carl Mortished |
July 10, 2008
THE lounge was thronged with bleary-eyed and grumpy suits looking in vain for seats. The endless queue for coffee snaked past whimpering children and inconsiderate backpackers.
As the PA speakers announced imminent departure, the throng became a melee at the exit -- an escalator had jammed.
It could be a typical morning at Heathrow, but in my case it was a 7am departure from the Eurostar terminal at St Pancras.
Don't get me wrong, the fast train to Paris and Brussels is a brilliant success, for the time being. Airlines ignore it at their peril and last week Air France threw in the towel and said it was in talks with Veolia, Europe's leading private rail-freight operator, about launching high-speed train services with Air France livery.
The airline industry has been crushed by the price of kerosene and deserted by passengers fed up with delays.
After decades of disappointment, false dawns and virtually bankrupt Channel Tunnels, we have finally arrived at the age of the train and the evidence is in the crowd at St Pancras.
Only five months after opening its doors in November, the new station is chock-a-block at peak hours, an exciting but slightly nerve-racking development for Eurostar and its biggest shareholder, SNCF, the French state railway.
Traffic growth on Eurostar is accelerating like an Alstom locomotive, increasing by 21 per cent in the first quarter, compared with the same period in 2007, and revenues are up by a quarter.
Those figures were no flash in the pan, a boost from all the hooplah at last year's opening of St Pancras. Traffic in the second quarter has grown at similar rates, insiders say.
It would not be unfair to say that squeezing the London-Paris journey time by just 20 minutes has boosted Eurostar's income by 25 per cent.
While Eurostar thunders through Kent, the competing service to Paris and Brussels is lost on a never-ending building site west of London.
The Terminal 5 fiasco has not helped British Airways' short-haul European business, but by next year (assuming no new operational disaster) it should have ironed out the wrinkles.
Then, BA is left with the awful question of whether short-haul air traffic has any future in Europe. The answer has to be a resounding "no".
When did you last hear of a service business where the fuel bill represented more than a third of the operating cost, substantially higher than the cost of the staff? Remember, BA and Air France are not shipping sand and gravel out of the Port of Rotterdam. They are selling a luxurious padded seat and a journey through the stratosphere to pampered executives.
If a third of revenue is burnt in the turbine needed to keep the executive's bottom in mid-air, it doesn't leave much cash for champagne and truffles, or even the pilot's wages.
To make matters worse, the European Commission has secured the agreement of Parliament and Council for the inclusion of airlines in the European Union's Emissions Trading System. It is another blow because, despite what you have been told, carbon trading is a tax on business and, more importantly, the electrified railways won't pay it.
Air France has watched over the past decade as SNCF's Train a Grande Vitesse (TGV) eroded its domestic business. Air services between Paris and Lyons and between Paris and Brussels have been suspended. The train is dominating traffic to Marseilles and Geneva and the new line east to Strasbourg will quickly extinguish air links.
On the London-Paris route, Eurostar boasted 70 per cent of traffic last year and that must be climbing fast. If the distance travelled is 600 miles or less, a train travelling at 190mph has the edge, city centre to city centre.
Of course, BA knew this and expected the attrition -- the airline has always struggled to make money on short-haul routes, battling with budget carriers operating services at lower cost.
If the big European flag carriers can still make their money, it is on long-haul services.
What matters to BA, therefore, is its ability to capture wealthy people who want to fly to America, Asia and Africa. And that market is now threatened.
Air France has the opportunity to capture wealthy Britons who live in a wide catchment area east of Heathrow, in Buckinghamshire, Essex, Suffolk and Kent.
By 2010, Europe's high-speed rail network will be open to competing operators.
The French airline is keeping mum about its plans with Veolia, but it is a reasonable bet that Air France high-speed rail services to Charles de Gaulle Airport will be rolling out of St Pancras within the next five years.
Where does this leave BA? While the British airline fusses over extra runways at Heathrow, its big competitor is planning to run trains all over Europe hoovering up passengers.
You can travel by high-speed train to Charles de Gaulle, to Schiphol in Amsterdam, to Frankfurt and Geneva airports. Where is the high-speed rail link to Heathrow? Is one planned?
The railroading of Air France's domestic business has been achieved by French government diktat and huge public subsidy.
The British Government, meanwhile, panders to BA.
It promotes new runways, oblivious to Heathrow's increasing isolation and lack of utility.
Forget Heathrow. We need Terminal 2 at St Pancras.
The Times
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