Reinventing the (he)art of travel

Eurostar Chief Executive Richard Brown heads up the company that has changed the face of the railways. His ambitious plans for revolutionising European travel have come under scrutiny, but with Eurostar’s increased focus on high-speed continental business travel – carbon neutral at that – this company is definitely headed in the right direction.

CXO. This autumn sees the long-awaited move from Waterloo to a new hub at St Pancras International. What were the business drivers behind the move, and what advantages will the new base offer both Eurostar and its customers?
RB. The driver is very simple: the completion of the UK’s first high-speed line, High Speed 1, that runs between London and the Channel Tunnel, starting from St Pancras International station.

The commercial opportunities of the move to St Pancras International for Eurostar are immense. From 14 November 2007, when Eurostar begins services from St Pancras International, average journey times will be 23 to 25 minutes faster. It’ll take just 2 hours 15 minutes from the centre of London to the heart of Paris, 1 hour 51 to Brussels and a mere 1 hour 20 minutes to Lille.

Eurostar has already seen a 28 percent increase in passenger numbers since the first section of the high speed line was completed in 2003, cutting journey times by 20 minutes. We’re expecting similar double-digit increases over the next three to five years – our aim is to be carrying 10 million passengers per year by 2012.

And with a dedicated high-speed service, Eurostar’s punctuality is set to improve further. More than 90 percent of our trains already arrive on time compared with less than 90 percent for the airlines that operate on our routes.

St Pancras International itself will be a highly impressive gateway to Europe, a destination to visit in its own right like New York’s rejuvenated Grand Central Station with excellent restaurants, prestige shops and a 90-metre champagne bar – the longest in Europe.

Millions more people will now be in easy reach of Continental Europe as Eurostar will have direct or close connections to six tube lines and seven national rail services at St Pancras and nearby King’s Cross and Euston.

We’re also opening a new station at Ebbsfleet International just off junction 2 of the M25 and close to the Dartford Crossing. It will have a practical catchment of more than 10 million people and a great alternative for some current Waterloo users from south of London who may not want to connect to St Pancras.

CXO. You are planning to move overnight, which sounds like an incredibly difficult undertaking. What challenges does this present, and how will you ensure the move goes as smoothly as possible?
RB. No mass transport operator has ever attempted such a huge undertaking but we’ve been planning this for some time and I am confident that the move to St Pancras International will go smoothly. We have a dedicated team working on over 100 separate work-streams. We are moving overnight and mid-week, outside of peak times, so there’s as little disruption as possible to our travellers.

CXO. Over the last few years there has been a rapid development of high-speed lines across northern Europe to link major cities. What opportunities has this development opened for Eurostar? What plans do you have to capitalise on this further?
RB. Travel is no longer about distance. It’s about the quality of the experience and the speed of the journey. The high-speed network across Europe is already providing a really attractive, fast-growing and effective alternative to low-cost short-haul air travel. Eurostar is working closely with our European partners so that travellers can easily book and connect onto destinations beyond our direct services. Our first quarter results this year show a 39 percent increase in passengers travelling on to the South of France for instance.

With the expansion of high-speed rail over the next couple of years such as the TGV Est service from Paris to Strasbourg that begins on 10 June 2007 and the new Dutch high-speed line linking Brussels and Amsterdam, high-speed rail is going to be even more compelling.

CXO. How are you partnering with other high-speed operators across the region to extend your service offerings? Why are partnerships important to a trans-European enterprise such as Eurostar?
NB. High-speed rail is expanding across Europe. Later this year Railteam, a partnership between Eurostar and seven of Europe’s high-speed operators including Thalys, SNCF, SNCB and Deutsche Bahn, will further improve the high-speed rail network and make rail an even more attractive alternative to air or car travel. Railteam is consequently an important element in meeting the growing demand for cross-border, faster, and environmentally-friendly travel within Europe.

CXO. The recent spotlight on climate change has led to something of a backlash towards air travel, especially for business use. Why is travelling by train a ‘greener’ alternative for business travellers?
NB. Early last year businesses began saying to us: we know you’re greener but by how much? With more companies wanting to reduce their carbon footprint, travel managers needed hard data. So we commissioned independent research that found a return trip on Eurostar to and from London, Paris or Brussels emits 10 times less carbon dioxide than the equivalent return flight.

In April, we announced that we are going greener still. We’re going to cut our emissions by 25 percent per traveller journey by 2012 and implement a 10-point environment action plan to reduce the environmental impact of all Eurostar operations by cutting the consumption of raw materials, sourcing responsibly and recycling more waste. And from 14 November 2007 all Eurostar journeys will be ‘carbon-neutral’. Unlike other transport operators, who ask passengers to volunteer to offset CO2 emissions at their own expense, we will bear the cost of making every journey carbon neutral – we will not charge a penny extra or pass the responsibility on to our customers. We believe we have a duty to reduce our environmental impact. It’s what our travellers want.

So not only do business travellers get a fast, seamless city-centre to city-centre trip, their carbon footprint is massively reduced at no cost to them.

CXO. How are you attempting to lure business users away from air travel and onto the train? What results have you witnessed so far?
NB. In 2006, the largest increase was in business traveller numbers, rising over 17 percent and generating an 18 percent increase in business sales revenue. In Q1 2007 we’ve seen a 14.5 percent increase and an 18.15 percent rise in business revenue on Q1 2006 as more passengers switched to Business Premier.

Alongside, quick city centre to city centre journeys, our dedicated Business Premier class (launched in September 2005) allows business travellers to work productively for the entire journey if they so wish – so journey times can be billed. There’s also just a 10-minute check-in for business travellers – a huge advantage. Many more business travellers are definitely attracted by the environmental benefits of using high-speed rail instead of short-haul air.

CXO. The company has made real in-roads into the cross-channel travel market and business growth in the past few years has been impressive. Despite this, however, the company has yet to turn a profit. When do you expect to become profitable, and what strategies do you have in place to help you reach this target?
NB. Eurostar is a complex organisation, being effectively an unincorporated partnership between three companies in France, Belgium and the UK. It doesn’t have a profit and loss account: the three companies share the costs and revenue and report their results separately. We expect the French part of the business to move into profit first, followed by Belgium and then the UK.

CXO. You may not be in the black yet, but your service levels have achieved global recognition and Eurostar has won the title of ‘World’s Leading Rail Service’ for the last nine years at the World Travel Awards. What’s the secret to your success in this area? How do you stay ahead of the competition?
RB. I believe we’re a truly progressive company. We don’t stand still. We could have rested on our laurels and stayed with ‘we’re 10 times greener than short-haul airlines’. But that wasn’t good enough for us - we wanted to be even better and even greener. We’re the world’s first rail operator and biggest mass-transport company first to offer ‘carbon neutral’ journeys at no cost to travellers.

In terms of service and product, Eurostar is passionate about providing the best experience for travellers.

CXO. Finally, what do you see as the greatest challenge/opportunity for Eurostar over the coming 12-18 months? What are you excited about?
NB. The move to St Pancras International and the beginning of Eurostar’s ‘carbon-neutral’ journeys on High Speed 1 on 14 November!

Richard Brown, Chief Executive Officer

Richard Brown has worked in the UK rail industry for 25 years. He worked for National Express Group from 1996 as Chief Executive, Trains and, latterly, as Group Commercial Director and Board member. National Express Group carries over one billion passengers each year on bus, train, tram and express coach networks, with 40,000 employees on three continents and a market capitalisation of £800 million. As Chief Executive of National Express’ Trains Division, Richard was responsible for successfully setting up and expanding the division, which employed 8000 staff in six operating companies and served 350,000 daily passengers.

Richard was also Chairman of the Association of Train Operating Companies (ATOC) in 2000 and 2001, during one of the most challenging periods for the UK rail industry.

Richard joined the rail industry in 1977, working for the British Railways Board. He progressed to Freightliners Limited, British Rail’s container transport subsidiary, before becoming a Director in British Rail’s InterCity division. He set up Midland Mainline Ltd as a subsidiary of BR and led the company through privatisation and sale to National Express. Midland Mainline Ltd has been the fastest growing InterCity train operating company since privatisation, with annual revenues of £100 million and over 1000 staff.

Richard has a first class masters degree in Engineering from Cambridge University, and is a graduate of Harvard Business School’s Advanced Management Programme.