Virgin aims to raise £700m to rival Eurostar on cross-Channel trains

Richard Branson’s Virgin Group is aiming to raise £700m to fund its plan to launch cross-Channel rail services that would compete with Eurostar.

Virgin, which previously operated intercity trains in Britain including between London and Glasgow, plans to start rail services connecting the UK capital with Paris and Brussels. It would also look to run trains to Amsterdam.

It is planning a high-frequency service, which could launch by the end of the decade. The company is seeking to become the first direct rival to Eurostar, which has run services across the Channel for 30 years.

Virgin Group said it intended to raise £300m in equity and £400m in debt, as first reported by the Financial Times.

The company founded by the British billionaire Branson said it also planned to be a “cornerstone” investor, helping to provide some of the initial capital required to get the project off the ground.

“The cross-Channel route is ripe for change and would benefit from competition,” a Virgin Group spokesperson said.

“While Virgin is not committing to launching a service just yet, we are seeking investment from like-minded partners to invest alongside Virgin and we are delighted with the progress made so far.”

Meanwhile, the Channel tunnel operator, Getlink, and London’s St Pancras railway station have agreed to work together on increasing the number of services between Britain and France, and opening up rail routes to Germany and Switzerland.

St Pancras is looking to triple the number of passengers who can travel through at peak times.

The partnership, which was announced last month, has been seen as a sign of growing momentum for increasing the frequency of rail links across the Channel between Britain and continental Europe.

In January, the rail regulator for Great Britain, the Office of Rail and Road (ORR), forced London St Pancras Highspeed – the company formerly known as HS1 that runs the station – to cut the prices it charges rail companies for using its track between St Pancras and the Channel tunnel to try to encourage new entrants.

Virgin is not the only company considering the London-Paris route. The Spanish rail company Evolyn has previously announced plans to start a high-speed service linking the British and French capitals, which is called a “strategic and high-demand” route. Evolyn said in 2023 it had reached an agreement to buy 12 high-speed trains from the French manufacturer Alstom, with the option of acquiring four more.

However, both projects aiming to break Eurostar’s monopoly on the cross-Channel rail route have been set back by a dispute over access to the depot in Leyton, east London, where Eurostar stores and maintains its trains.

Any new cross-Channel rail operator would also be required to keep trains at the site, and Virgin and Evolyn have asked the ORR to intervene. The ORR has commissioned an independent study looking at capacity at the Temple Mills depot.

Eurostar is the only company that has carried foot passengers across the Channel during the 30 years of the tunnel’s operations, although Getlink’s Le Shuttle also takes cars with drivers and passengers.

Eurostar has faced criticism over high prices, and it has ditched international services from Ashford and Ebbsfleet in Kent.

Eurostar has been contacted for comment.