Virgin Group Raises £700m to Challenge Eurostar’s Dominance in the Channel Tunnel

Eurostar is the only company that has transported foot passengers across the Channel during the 30-year tunnel’s operation.

Eurostar has dominated the Channel Tunnel route since its launch in 1994, with record demand of 19.5 million passengers in 2024. However, it faces rising competition as new players prepare to enter the market.

Richard Branson’s Virgin Group is trying to raise £700 million to finance its plan to introduce cross-channel rail services competing with its rival Eurostar.  

Virgin aims to launch rail services connecting the UK Capital with Paris and Brussels. The company, which once operated intercity trains in Britain, particularly between London and Glasgow, first focused on connections between London, Paris, and Brussels. It intends to increase travel alternatives by eventually extending its routes to Amsterdam.

It plans to launch a high-frequency service before the end of the decade. The company wants to be the first direct competitor of Eurostar, which has operated services across the Channel for 30 years.

The British billionaire Branson stated they also planned to be a cornerstone investor, helping provide the initial capital needed to kickstart the project.

A Virgin Group spokeswoman stated that the cross-channel route is ripe for change and would benefit from the competition.

She added that Virgin is not yet committing to launch a service, but they are looking for like-minded partners to invest in Virgin and are happy with the work progress so far.

London’s St Pancras train station and Getlink, the channel tunnel’s operator, have agreed to collaborate to expand the number of trains between Britain and France and opening rail connections to Germany and Switzerland.

St Pancras’ goal is to increase passenger capacity threefold during peak hours.

With competitive timetables, many analysts expect a high-frequency rail service to challenge the Eurostar’s 30-year dominance. The company will transform how people travel by rail in Europe with plans to launch operations by 2029.

Eurostar responded warmly, embracing new competition in the European rail industry. The operator notes that the competition increases demand for high-speed rail throughout the continent.

The new competition is a sign of growing momentum for increasing the frequency of rail services across the Channel between Britain and continental Europe.

In January, Great Britain’s rail regulator, the Office of Rail and Road (ORR), ordered London St Pancras Highspeed, the company that operates the station and is formerly known as HS1, to lower the prices it charges rail companies for using its track between St Pancras and the Channel tunnel to attract new rail companies.

Virgin is not the only rail company considering the London-Paris route. The Spanish rail operator Evolyn has confirmed plans to start a high-speed service connecting the French and British capitals, a strategic and high-demand line.

Evolyn said in 2023 that it has agreed to buy the 12 high-speed trains from Alstom, a French company, with the option of purchasing four more.

However, both projects trying to break Eurostar’s monopoly on the cross-channel rail route are on hold due to the dispute over access to the depot in Leyton, east London, where Eurostar stores and repairs its trains.

Virgin and Evolyn have asked the ORR to step in and ensure that any new cross-channel rail operator maintains trains at the location. The ORR has commissioned an independent study to examine the capacity at the Temple Mills depot.

Eurostar is the only company that has transported foot passengers across the Channel during the 30-year tunnel’s operation, although Getlink’s Le Shuttle also takes vehicles with drivers and passengers.

Eurostar has previously faced complaints about its high prices and has stopped using international flights from Ashford and Ebbsfleet in Kent.