Thalys has to borrow money for the first time; merger with Eurostar postponed
For the first time in its history, Thalys has to rely on external financing. In addition, due to the financial consequences of the corona crisis, the carrier has decided to postpone the merger with Eurostar. The turnover of Thalys in 2020 was over 165 million euros, no less than 70 percent lower than a year earlier.
The net loss was still somewhat limited at 140 million euros. Thalys was able to save 150 million euros by operating the timetable and implementing a cost-cutting plan. Despite this, the carrier does not expect to have enough money in the account this month. Discussions are currently underway with several banks to raise 100 million euros in external financing.
Thalys transported only 2.5 million travelers last year, compared to 7.8 million in 2019. “The pandemic we are experiencing is the most serious crisis in our history. For over a year, travel restrictions have been taking a heavy toll on travelers and, of course, people in our company”, said CEO Bertrand Gosselin.
Merger met Eurostar
The corona crisis has put the planned merger between Thalys and Eurostar on hold. The French SNCF – which is the largest shareholder of both carriers – announced the merger at the end of 2019. It is unclear when the merger will still be a fact. Talks are ongoing, but Gosselin states that both carriers must first get their financing in order. Eurostar has also been hit hard by the corona crisis. According to SNCF, a month of financial support from the government is needed to keep the carrier afloat.
Despite the current financial concerns, Thalys says it is looking to the future with confidence. “We remain convinced of the significant growth and development potential of international high-speed rail transport in Europe,” said Gosselin. Thalys does expect that the recovery from the corona crisis will take longer than expected because there are still many travel restrictions in place. The carrier is counting on better times in the summer when more people are vaccinated, but does not expect to achieve the turnover of the crisis again until 2024.
Fewer business travellers
By that time, a smaller part of the turnover will be generated from business travel. Thalys takes into account about 15 percent fewer business travellers, who have discovered the convenience of video calling during the lockdown. This will be largely offset by an increase in passengers, the carrier predicts. Gosselin: “The pandemic has affected the way we travel and has only accelerated the trend towards more sustainable travel and destinations closer to home.”