Eurostar Trims Jobs, Plans Timetable Cuts as Brexit Bitesby
Around 80 positions to go amid ‘challenging environment’
Unspecified number of frequencies will also be eliminated
Eurostar International Ltd. will cut jobs and trim train frequencies between London and mainland Europe following a decline in demand for travel in the wake of Britain’s decision to quit the European Union.
The operator of Channel Tunnel express services is in talks with U.K. unions about eliminating 80 posts across its business via voluntary redundancies and the offer of sabbatical leave, it said Tuesday, while declining to provide details of the planned timetable revisions.
“This is a challenging environment for all travel companies and we need to manage our costs carefully,” spokeswoman Catherine Bayles said by phone. “That’s why we are looking at the size and shape of our business.”
Eurostar said July 29 that passenger numbers fell 3 percent in the second quarter, with revenue slumping 10 percent, as fewer business travelers used its trains in the run up to the June 23 Brexit vote and demand for leisure trips to Paris and Brussels was hurt by terror events in both cities.
The introduction this year of 10 longer e320 trains manufactured by Siemens AG means Eurostar can maintain overall capacity levels while still reducing frequencies, according to Bayles. The new trains have a capacity of about 900 people, compared with 750 for the original fleet.
Other European travel companies have downgraded their earnings outlooks following Britain’s EU referendum, though among airlines the focus so far has generally been on the impact of fluctuating exchange rates rather than any real decline in demand.
Discount carrier Ryanair Holdings Plc, which counts the U.K. as its biggest market but is based in Ireland and reports in euros, said Tuesday that the pound’s decline versus the single currency means net income for the year ending March 31 will increase by only about 7 percent rather than the 12 percent previously anticipated.
British Airways owner IAG SA has also warned that U.K. receipts will be worth less when translated into euros, while reining in capacity growth amid concern that people will review travel plans. And EasyJet Plc, based in Luton, near London, posted its first annual profit decline since 2009 earlier this month, saying sterling’s slide has bloated the fuel bill, paid in dollars, as well as euro-denominated costs.
Eurostar’s planned job cuts and timetable changes were reported earlier by the Daily Telegraph newspaper.