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Gaining ground
Business Travel World – December 2008

Environmental concerns, economic prudence, higher air fares and now infrastructure improvements may all be tipping the balance towards the train. Mark Smulian examines the development of high-speed rail

A decade or so from now a business traveller could board a fast train in Edinburgh, do a quick change at London St Pancras and then be whisked, if with a few short slower stretches, at more than 250km per hour to Warsaw, Naples or Malaga.

That is the claim made by Europe's rail operators, who say they will provide serious competition for air across an increasing area of the continent.

While a train cannot match an aircraft's flight speed, rail's big selling points are its ability to run from city centre to city centre with comparatively short check-in times, and offer a quiet working environment in transit.

Eurostar has been at St Pancras for a little over a year. It claims that, with its terminal no longer stranded on the 'wrong' side of central London, it is winning custom from the airlines both among passengers based in London and those who might previously have flown from a regional airport but now take advantage of through ticketing to travel by train to St Pancras to catch its services.

It cannot know the precise reasons for passengers' choices, but says its statistics for the third quarter of this year give it cause for optimism. Passenger numbers rose by 6.4% to 2.37m compared with the same period in 2007, and ticket sales income by 2.4% to 152.3m, despite the disruption caused by the Channel Tunnel fire.

Eurostar's average punctuality during the June to September 2008 quarter was 93.5%, against what it says was an air industry average of 64.8% on the London-Paris and London-Brussels routes.

Its commercial director Nick Mercer says these figures "show a very large transfer of passengers from air routes to Eurostar", including among those travelling for the UK regions to London.

"Some of the increase is because St Pancras is convenient, and some is due to concern about rising air fares and the environment," he says.

Mercer notes that business travellers "have to build in so much contingency time for flying, and put up with the airport hassle factor, but on a train you can be working as soon as you're at your seat".

Corporate social responsibility polices have also played a part, he says, "where companies have policies that direct staff to rail for the UK and north west Europe on environmental grounds alone.

"Add all that together and business travellers will use rail more on any air corridor we are competitive."

From mid-2009, the high speed lines from Brussels to Cologne and Amsterdam are due to open, bringing those cities just within the four hour limit, above which even Eurostar concedes business travellers will normally prefer to fly.

Some evidence to support Eurostar's case comes from Raj Sachdave, head of sales at Capita Business Travel, who says: "We know some firms are already taking advantage of Eurostar being at St Pancras rather than Waterloo, as going across London to the south of the river was always a put off."

Sachdave also points to clients who use this 'green' travel policy as a selling point to their customers and says higher train frequencies this winter have meant "catching a train has never been more convenient".

Convenient it might be, but is it fast enough? Sachdave notes that the time spent on trains from UK regions "deters some users, so again reinforcing the need for a new high speed line".

The Conservative and Liberal Democrat parties has come out in favour of a London-Birmingham-Manchester line as an alternative to a third Heathrow runway, though the government remains sceptical.

Airlines have been oddly quiet during Eurostar's assault on their market. BMI declined to comment and a British Airways spokesman noted only that "its clear that traffic is down for all airlines, but we still run 11 flights a day from London to Paris and they are full, though we have done well from the Channel Tunnel fire disruption.

"There has been a downturn in passenger numbers generally and its impossible to say how much of it might be due to rail."

VLM argues that its flights are both quicker and cheaper than the train between Manchester and London, since rail saver fares are unavailable at peak time.

A spokesman denied the airline had dropped its London-Liverpool service because of rail competition and pointed instead to the effect of increased airline passenger duty on the route.

Statistics from the Civil Aviation Authority cast only limited light the air versus rail debate.

The number of passengers between Heathrow and Brussels in August was 41,771, a drop of 22% from August 2007 and numbers from London City were down by 56% to only 780.

Volumes fell at all other airports except Gatwick and Southampton, both now the wrong side of London for Eurostar.

For Paris flights, numbers fell by 24% and 32% at Heathrow and London City respectively, and suffered appreciable falls from Newcastle, Leeds Bradford and East Midlands - all conveniently linked to St Pancras - while being more or less static elsewhere.

France has the most extensive high speed network so far. A spokeswoman for its SNCF rail operator says: "Our objective is to double our international turnover, currently 20% of our 7bn turnover, and to transport 33m passengers in 2013 compared with the current figure of 20m.

"This strategy is based on consolidating our partnerships with Eurostar, Thalys, and others to develop the alliance of Railteam. Equally we intend investing in the new Italian operator NTV."

SNCF points to the launch of the TGV Est service to Strasbourg in 2007, which has seen its market share against air rise from 30% to 70% as the journey time was cut from four hours to two hours 15 minutes.

A decade ago budget airlines hardly existed and few but specialists were concerned by global warming. Will equally radical changes see the rail operators, as they claim, in the driving seat of European business travel by 2020?

Railteam

Railteam will, its founders claim, before long deliver a seamless high speed rail service across most major European counties.

It is a collaboration between Eurostar, Thalys, Lyria - the TGV service from France to Switzerland - Deutsche Bahn, SNCF, The Netherlands' NS Hispeed and the main operators in Austria, Belgium and Switzerland. It forecasts that by 2010 there will be 25m passengers a year using members' high speed services, and that its coverage will triple by 2020.

Eurostar's commercial director Nick Mercer says: "Railteam is a top priority and there are meetings at managing director level every two months.

"The focus has been on improving facilities for travellers, for example that all staff should speak English."

He says it will increasingly become the norm for travel management companies to be able to book clients through on different members' services.

"You can already get through tickets from UK regions to French regional stations, and Eurostar tickets are valid to any station in Belgium," Mercer says.

"It is also possible to book though to much of Holland and Switzerland and will be to Germany as we do bilateral deals with other operators."

Railteam promises that a 30m investment in ticketing systems will go live during early 2009.

Sabre now offers a facility to order Deutsche Bahn tickets and receipts online, which can now be printed on any standard laser printer, instead of on special machines available only in Germany. Its vice-president for marketing Geoffrey Breeze says: "Rail suppliers in Europe are enjoying significant growth, fuelled by rising airfares, oil prices and environmental awareness."