Italian state train operator joins challenge to Eurostar monopoly #ItalyFinance

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Italy’s state railway company plans to invest €1bn to launch a high-speed London to Paris rail service through the channel tunnel by 2029, becoming the latest company aiming to end the decades-long Eurostar monopoly.

In an announcement on Tuesday morning, the state-owned FS Group, which operates Trenitalia, said the service would be launched in collaboration with Spain’s Evolyn group, run by the Cosmen family. The service would usher in a “new era of competition and accessibility in the European high-speed rail landscape”, it said.

Companies including Sir Richard Branson’s Virgin Group and Gemini are also interested in expanding high-speed railway services between the UK and Europe. But the Italian train operator aims to be first out of the blocks.

Stefano Antonio Donnarumma, chief executive of FS Group, said: “More competition will help to create a more efficient and customer-orientated industry, offering a real alternative to air travel.”

The EU has liberalised high-speed rail services, seeking to eat into the low-cost air market and cut carbon emissions by encouraging competition on busy lines to increase passenger numbers.

The high-speed line linking London to mainland Europe is one of the few in Europe without competition. Increased environmental awareness has also left people willing to tackle longer train journeys, with routes taking six hours or more seen as competitive with flying.

The owner of the high-speed rail line from London to the channel tunnel, London St Pancras Highspeed (LSPH), last week unveiled financial incentives to try to encourage operators to launch services between London and mainland Europe.

Evolyn, which is backed by the largest shareholder in Mobico, was the first company in 2023 to announce plans to break up Eurostar’s monopoly. It has signed a memorandum of understanding with the FS Group, although details of how the partnership will work and the funding model have yet to be finalised.

Trenitalia said it had already obtained the necessary permits and licences in France to operate a London to Paris service. It also said it had received confirmation from the UK’s Office of Rail and Road that there was space available at the Temple Mills depot, which it would need for train maintenance.

Operational planning for additional capacity at St Pancras was at an advanced stage, it added.

Trenitalia did not outline details of a possible order for trains, which industry experts have said is the biggest hurdle for any company looking to launch a new cross-channel service. But a person at the company said they did not expect acquisition of trains to be a hurdle.

Trenitalia has been expanding its presence in other European markets and launched a high-speed rail service between Milan and Paris. It also runs several intercity trains in France, including a planned high-speed connection between Paris and Marseille.

In addition, it operates high-speed trains in Spain, under the brand Iryo. It is providing regional train services in Germany, and operates the driverless metro system in Riyadh. In its annual report for 2023, the company said it had generated more than €2bn in turnover from its international operations.