Some problems down the line for Eurostar

Stuart%20Smith%2C%20EditorHe may be one of the industry’s most conspicuous self-publicists, but at least Greg Nugent, outgoing marketing director of Eurostar, has got something to boast about.

Nugent’s stint at the cross-channel train operator has been studded with success. Among the high points was the inspired Quest competition, which used the popularity of the Da Vinci Code to get people back into Eurostar carriages following the 7/7 terrorist attack. Equally, he can congratulate himself on the smooth and triumphant opening of Eurostar’s spanking new high-speed terminal at St Pancras. Compare and contrast T5’s debut if you wish.

And yet, while a five-year stint exonerates Nugent from any charges of revolving-door opportunism, we must ask whether this isn’t, all said and done, a good time to move on from Eurostar. Are the best days over?At first sight this seems an absurd suggestion. After all, the stock of high-speed rail travel has never been higher. TGVs are trouncing the short-haul airline competition in much of western Europe, the UK not excluded. They’re winning hearts in the green propaganda battle and minds where soaring aviation fuel costs and the customer experience are concerned. Conservative leader David Cameron has implied as much in proposing high-speed railway links as a genuine alternative to a third runway at Heathrow.

And yet…Eurostar itself has some serious issues ahead of it whose solution will require carefully balanced judgement. To begin with, the train operator has an extensive refit coming up. Its existing TGV stock is ageing and not as reliable as it might be. It can upgrade it and add new signalling equipment that would make the trains suitable for a proposed extension of the network to Amsterdam. Or it can plump for the new (and allegedly more reliable) high-speed trains made by Alstom. Either way, the refit won’t be cheap.

This would not be so burdensome if Eurostar continued to enjoy a monopoly on its existing routes. But the chances are it will not. Under new EU legislation, the channel tunnel lines will be opened up to competition from 2010, and both rival airlines (in the form of Air France) and train operators (Deutsche Bahn) are showing interest.

That means Eurostar will have to sharpen up its act in several respects. At the moment, it is all things to all travellers, from back-packers to business executives. The coming of competition will crystallise the need for more careful market segmentation. Not to mention a better, more transparent pricing strategy. Should there be a (much) cheaper and cheerful option à la Ryanair? And what about a Pullman-class service for businessmen (at the moment the catering, for example, leaves much to be desired)?These and other issues will require adroit handling. In the event, it’s probably just as well that Nugent is planning to stay on at Eurostar in an advisory role.


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