Virgin plans high-speed rail to compete with Eurostar; Amsterdam on the route

Virgin Group, led by billionaire Richard Branson, is seeking to raise 700 million euros to fund a new high-speed rail service designed to compete with Eurostar. The company plans to offer direct rail services between London, Paris, and Brussels, with plans to extend the route to Amsterdam in the future.

Virgin intends to secure 300 million euros in equity and 400 million euros in debt to fund the project. The company confirmed this to the Financial Times, noting it plans to be a cornerstone investor in the venture. The new service would be Virgin’s first direct competitor to Eurostar’s 30-year-old network and could launch as early as 2029.

The proposed service would offer high-frequency trains, aiming to directly challenge Eurostar’s dominance in cross-Channel travel. Virgin is one of several companies looking to enter the rapidly expanding cross-Channel rail market, driven by the growing popularity of high-speed train travel across Europe.

In the UK, London St Pancras High Speed, the owner of Eurostar’s London terminal, is planning to more than double the station's capacity. Robert Sinclair, CEO of London St Pancras High Speed, told FT in December that the high-speed line currently has 50 percent unused capacity, creating a significant opportunity for new services.

Getlink, the owner of the Channel Tunnel, has simplified safety regulations and pledged 50 million euros in subsidies to encourage new cross-Channel rail services. However, any new operator, including Virgin, would face significant hurdles, such as purchasing trains compatible with Channel Tunnel safety standards and finding space in crowded stations.

Phil Whittingham, the lead for Virgin’s rail project, acknowledged the challenge but emphasized Virgin's strength in introducing a new era of cross-Channel travel. "It’s a huge undertaking, but we think Virgin is the right brand to signal that new era," he said.

Virgin also faces competition from Evolyn, a Spanish-led project that aims to launch a similar rail service. However, both Virgin and Evolyn are encountering delays due to a dispute over access to the east London train depot used by Eurostar to maintain its high-speed trains. This depot is the only location in the UK where cross-Channel trains can be serviced, and both companies have appealed to the UK rail regulator for access. Eurostar has said the depot is at full capacity and cannot accommodate new operators.

The UK regulator, the Office of Rail and Road, is currently reviewing the situation. A letter published this week stated that an independent study of the depot’s capacity is still ongoing and has not yet concluded.

Eurostar has expressed support for the development of additional rail services in Europe, stating that "competition in the high-speed rail sector is another example of the growing demand for rail transport in Europe."