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Eurotunnel in Folkestone celebrates 20th anniversary with chairman and CEO Jacques Gounon heralding turnaround from billions in debt to profit

By Sam Lennon

On the 20th anniversary of the Channel Tunnel today, its operators Eurotunnel are going from strength to strength.

But, as its boss acknowledges, this success came after being on the brink of extinction.

Figures show Eurotunnel in a firm financial position, with revenues increased by 8% to €260.5m for the first quarter of 2014.

Eurotunnel services from Folkestone to France
Eurotunnel services from Folkestone to France

But when chairman and chief executive Jacques Gounon took over in June 2005 it was billions in debt.

Mr Gounon steered the company into a restructuring plan, which meant by 2007 it made a profit for the first time and has been on solid financial ground since.

"The new results are a positive sign and I think we will further benefit from the recovery of the British economy," said Mr Gounon.

"The success has been the result of teamwork, no single person could have saved the company.

"My only regret is that the restructuring was not done earlier by my predecessors.

"But by 2007 we had a deadline to meet to solve our problems and we would have gone bust if we had not restructured."

Eurotunnel chairman and chief executive Jacques Gounon
Eurotunnel chairman and chief executive Jacques Gounon

According to Mr Gounon, the turnaround in fortunes of Eurotunnel has been down to two things – teamwork and how it has dramatically cut journey times from London to Paris.

They are certainly two of the key factors behind the healthy figures just announced for this year's first quarter, but in many ways the Frenchman knows that the hard work is just beginning.

Last week, Eurotunnel disclosed plans to double its holding capacity for lorries at its Cheriton terminal.

This would drastically reduce the risk of using Operation Stack.

Queen Elizabeth II and France's President Mitterand cut the ribbon to officially open the Channel tunnel in 1994. Picture: PA/Tim Ockenden
Queen Elizabeth II and France's President Mitterand cut the ribbon to officially open the Channel tunnel in 1994. Picture: PA/Tim Ockenden

The company has also revealed its involvement in a project to link the UK and French power grids through the Channel Tunnel.

The Eleclink scheme will start construction later this year with 32 miles of cables carrying 50% more electricity between the two countries. The scheme has been approved by regulators in Britain and France.

Mr Gounon, 61, said: "This was something we proposed two years ago.

"It is about making the best use of infrastructure and there is clearly a need to increase connectivity.

"It is easy enough to implement because the cabling would simply go through the tunnel. Further into the future, I would like to enlarge Eurotunnel's route to HS2."

Eurotunnel has one immediate problem to solve - the months of legal wrangling over its ferry service MyFerryLink from Dover, launched in 2012.

MyFerryLink leaving Dover Port
MyFerryLink leaving Dover Port

Rivals P&O and DFDS Seaways made an official complaint and the Competition Commission made a provisional ruling against Eurotunnel that its ferry service from Dover should close.

Eurotunnel appealed and a final decision by the Commission is not expected until next month.

Mr Gounon said: "We went into MyFerryLink to complement our shuttle service and we are not in the same market as the other companies.

"I do not understand why the Competition Commission made its ruling."

Total revenues for the Eurotunnel Group for the first quarter of 2014 reached €260.5m, up 8% compared with €240.5m in 2013.

For the Tunnel, this breaks down to €106.5m in shuttle revenues, a rise of 5% from the same period of 2013, and 2.3m passengers on Eurostar, an increase of 3%.

MyFerryLink made a revenue of €18.3m in revenue in the first quarter of 2014 and reached a market share of 9.9% compared with 7% in the same period in 2013.

Eurotunnel set a record for passenger numbers over a Christmas period in 2013 – 210,000 on Le Shuttle from December 13 to January 5.

On March 25, Eurotunnel carried its 20 millionth truck, with almost 1.5 million lorries in 2013.

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