High-speed rail operator Eurostar is eating away at airline profitability in the once lucrative London-Paris market, prompting bmi to drop the route.
Citing intense competition from other airlines and Eurostar, bmi says it will terminate at the end of February its five times per day Heathrow-Charles de Gaulle service. Bmi has operated the route since 1990, offering at one point eight daily frequencies.
"There are now eight airlines operating 72 flights a day between London and Paris, and with a 37% reduction in the overall air market in the past four years there simply aren't enough passengers to fill them," says bmi chief executive Nigel Turner. "Additional competition from high-speed rail links, set to intensify further in autumn 2007 with the completion of the second section of the UK's first high-speed line, means that unfortunately the route is unlikely to sustain an acceptable level of profitability."
Eurostar has posted steady traffic gains since launching services through the Channel Tunnel in 1994, slashing train travel times from London to Paris and Brussels. Eurostar has reported an 11% increase in sales for 2006 to £518 million ($1.02 billion) on a 5.4% increase in traffic to 7.85 million passengers. The traffic boost includes a 4.5% increase in leisure travellers and a 17% increase in business travellers
"Increased security at airports since the summer and foggy weather in the UK before Christmas meant that thousands of passengers switched from the airlines to Eurostar," it says. "Many of these travellers were using Eurostar for the first time and it is estimated that 1,000 business customers a week have now permanently transferred from flying to high-speed rail."
Eurostar chief executive Richard Brown says Eurostar is offering a better travel experience and says travellers also "are being attracted by the environmental benefits of using high-speed rail instead of short-haul air".
Source: Airline Business
