The Eurostar chief who is spoiling for a fight

Chris Blackhurst
30 Sep 2009

IT'S 9.30 in the morning and St Pancras is humming. Business travellers are gathering; a school party is grouped together; there are leisure passengers in the droves. And they're not all British going over there. The air is thick with the accents of French and Belgian people arriving here or heading home — which is not how I remember the former Eurostar terminal at Waterloo.

There's no doubt: the teeming cosmopolitan crowd, the Tannoy announcements in English and French and their mention of foreign destinations, the sleek trains and the refurbished terminal with its champagne bar and smart boutiques, create an atmosphere unique to a British railway station.

It's been compared to an airport but there's an immediacy and a proximity you don't get at Heathrow or elsewhere. You queue up, get your passport and bags checked and get on the train — for most air services, those days are receding into memory. When I greet Richard Brown, Eurostar's chief executive, he is all smiles. We go through the aviation-style scanner and into a business class lounge that would not appear out of place at Heathrow's T5.

“Most of our business has been resilient through the recession,” he says, nodding in the direction of the window overlooking the concourse. “Partly, it's been because from the Continent, with the currency, the UK is proving to be more attractive for the French and Belgians.”

He frowns. “It's true that business travel has been a different story but it's not been that bad. If you talk to an airline, they will be 20% down on last year. In the first half of this year, we were 6% down on volume overall and 7% down on revenue — so it was a less bad result, shall we say, than the airlines.”

It's also the case, he admits, that Eurostar will miss its initial target of “10 by 10”, of 10 million passengers a year by 2010. In the first six months of this year, it carried 4.6 million. “We won't be at 10 million in 2010 but that's because of the recession,” says Brown, “it's affected us as much as everyone else.”

At present, Eurostar follows a complex structure, divided between SNCF of France, Britain's Department for Transport and Belgium's state railway. That will change next year, when it becomes one single entity. The French stake will be smaller but under the new arrangement, Brown, 56, will become chairman. A Frenchman, Nicolas Petrovic, currently chief operating officer will move up to chief executive. The reason for the shift is the ending of Eurostar's monopoly with the implementation of EU Open Access legislation. For the first time, Eurostar could face a battle for customers.

Brown says he expects the Germans, in the shape of Deutsche Bahn, and the French from Air France to offer rival services. “We're quite looking forward to it — it keeps us on our toes. It will be interesting because we've never seen head-to-head competition in Britain before between different railway companies on the same routes and using the same stations. Here, there was competition in the days before nationalisation but that was between different companies using different routes and stations and serving the same cities. This will be straight head to head.”

His prediction is that it will take them “a minimum of two years to set up and get the service running so it isn't likely in 2011 but it is expected — probably in 2012, because of the Olympics”.

Brown concedes the rivalry “is bound to hit Eurostar's revenues” but claims “it should also grow the market. It's bound to create a buzz and increased interest — suddenly we won't be the only people in town”.

The Germans and French are likely to target London-Paris and London-Brussels but London-Cologne is another possibility. “The important thing is what we are doing now to get ready for the competition,” he says. “The key objective of the restructuring of Eurostar is to create a single Eurostar company in all three countries.”

Under the present arrangement, he adds, “decision-making can be slow, because you need to get all three partners lined up. It's very important we turn Eurostar into a fit-to-compete organisation.” Reporting practices aren't clear either, so that at Gare du Nord for instance, the Eurostar service is operated by staff from SNCF wearing Eurostar uniforms — there is no direct chain of command from them to Brown as the chief executive. It's the same in Belgium, he says. “It means staff may not be as motivated as they could be and as they will be, because technically they don't work for Eurostar.” That too will change so there is one boss, one employer.

The shift, he says, will be “seamless — it will be like the switch from Waterloo to St Pancras when passengers didn't notice anything untoward and it all worked fine from day one.” Brown will move to a part-time role. “A full-time chairman and a full-time chief executive would crimp the style of the chief executive.”

As well as simplifying the structure, he says, “we're working very hard to prepare for competition. We're reviewing all the ways we work — everything from how we select and train staff to how we equip our services on board and at the stations. We're looking at what will differentiate us from Deutsche Bahn and Air France — we will all be running high-speed trains that will take the same time to travel to the same stations, so quality of service and ability to be innovative will be crucial.”

Eurostar trains are 15 years old so a complete interior and exterior makeover has been ordered, to match the competition's brand-new stock. Italian designer Pininfarina has got the job and, says Brown, “their remit is to make it look as though the trains are new”.

Eurostar has yet to make an overall profit but that is because it has been paying steep access charges to use the high-speed line in the UK, from London to the Channel. On the French side, where those tariffs are less, it is profitable. The good news, says Brown, is that those UK fees have come down. “There is a new contract in place in the UK. We now pay lower charges and we pay per train. It's the same charge that everybody else pays to use the line.

“It's true we're still paying more per kilometre in the UK, but it is less — it's a very significant reduction, a third to a half down. Before, there was a fixed charge, regardless of the number of trains we ran, of more than £200 million a year. It was fixed 20 years ago when the world was very different and the project was first set up.”

The move to St Pancras has been a huge success, says Brown, with passenger numbers from north of London having increased dramatically. Eurostar, he says, now has “75% of the air-rail market between London-Paris and London-Brussels. On London-Brussels, our share was in the low 40s in 2003, today it's identical to London-Paris: 75%. In fact, London-Brussels has just overtaken London-Paris for the first time”. There's none of the hassle of getting to and from the airport and the waiting, he emphasises, and it's greener than flying.

For someone who professes to “not being a train buff or a trainspotter”, Brown has more than stayed the course in the rail industry. Educated at Marlborough College, the Wiltshire public school, and armed with an engineering degree from UCL, he went into trains as a graduate trainee at the former British Rail, against his father's wishes. “He was pretty cross but I liked transport — I found it more interesting than the alternatives. I've never been bored. It's always interesting, stimulating and challenging.”

As to what he will do next, he doesn't know. “I'm looking for something else to do. I've no firm plans. I may do one or two other things.”

He pauses and smiles. “Yes, I hope to be going plural — it will be nice to do one or two other jobs.” His assistant looks at her watch. He's got to go. For now, he's got a railway to run.