Virgin plans to rival Eurostar with Channel Tunnel trains

Virgin Set to Challenge Eurostar with New Cross-Channel Rail Service

Virgin Group, spearheaded by billionaire Richard Branson, is advancing plans to launch a high-speed rail service to rival Eurostar. This development in Channel Tunnel train travel follows a positive ruling from the rail regulator, removing significant obstacles for Virgin’s entry into the cross-Channel market. The announcement coincides with Virgin Atlantic airline reporting its return to profitability, marking a significant milestone since the pandemic.

Green Light for Competition on Cross-Channel Routes

The Office of Rail and Road (ORR) recently concluded that sufficient capacity exists at Eurostar‘s Temple Mills depot in London, paving the way for Virgin to operate its proposed European rail service potentially from 2029. Access to a suitable depot, essential for train maintenance and storage, has long been considered a crucial factor for any company aiming to compete with Eurostar on Channel Tunnel routes.

Temple Mills Depot: Key to Unlocking Rail Competition

A Virgin spokesperson highlighted the significance of the ORR’s finding, stating, “Finally, a green signal for competition.” They emphasized that “The Temple Mills depot is the only UK facility capable of accommodating European-style trains,” adding that “claims suggesting it was at full capacity have previously hindered Virgin’s market entry.”

Virgin Welcomes ORR Decision and Plans for Expansion

“Virgin is extremely encouraged by this outcome and appreciates the ORR’s report, which is set to stimulate competition on the cross-Channel route, ultimately benefiting passengers,” the spokesperson continued.

They further stated, “With no remaining major impediments, Virgin is prepared to embrace this opportunity, leveraging its extensive experience in the rail sector and proven success in establishing globally recognized travel brands. We anticipate making a formal announcement shortly. Stay tuned for updates.”

Regulatory Approvals Still Required

Before commencing operations, Virgin will need to secure approvals to operate trains on HS1 lines and through the Channel Tunnel itself. This includes obtaining a license to run trains in Britain and a safety certificate, along with equivalent documentation for operations in their intended European destination country.

Virgin Atlantic Reports Profit Amidst US Market Concerns

In separate news, Virgin Atlantic, majority-owned by Branson, announced its financial turnaround, reporting a profit for 2024. However, the airline cautioned about “some indications of slowing US demand” in recent weeks. Finance chief Oli Byers attributed this to “a natural response to general consumer uncertainty currently prevailing in the US.”

Economic Headwinds and Market Reactions

Concerns regarding potential impacts from international trade tensions are believed to be contributing to cautious spending among American consumers. Following Virgin Atlantic‘s update, shares in rival airline group IAG, parent company of British Airways and listed in London, experienced a significant decline, falling by 6.6 percent.

Financial Recovery for Virgin Atlantic

Despite market anxieties, Virgin Atlantic reported a profit of £20 million in 2024, a stark contrast to the £139 million loss recorded the previous year. The airline also announced record revenues of £3.3 billion, driven by carrying 5.6 million passengers throughout the year.