High-speed rail poses a threat to domestic operations
2012-06-01 10:48:07
Summary：High-speed rail is rapidly becoming a pillar of China’s transportation network.
High-speed rail is rapidly becoming a pillar of China’s transportation network. Local airlines that have prospered through years of strong demand growth and a lack of effective ground transport alternatives are now being challenged by this new form of competition, which is also heavily supported and promoted by the government. China's high-speed rail service has already had an adverse effect on airlines' domestic business, particularly on sectors of less than 500km.
At more than 8300km, the burgeoning high-speed rail network was already the world’s most extensive by the end of 2010, with as much of 3500km of new high-speed rail lines to be constructed in 2012. By 2015, China’s high-speed rail network will span 25,000km. The four main north-south routes, including between Beijing and Guangzhou, will be completed in 2012, according to People’s Daily, meaning further competition is expected with the domestic air travel network in 2013 and onwards.
Some estimates put the loss in revenue for China’s aviation industry from the HSR, from reduced traffic and price pressure, at up to 3-4% of total revenues. CAAC director general Li Jiaxiang has said some 50% of flights less than 500km in length and about 20% of flights between 800km and 1000km could become unprofitable as a result of HSR competition. Sectors above 1500km are not likely to be threatened.
Meanwhile, the five airports in China’s Pearl River Delta region met in May-2012 and forecast the development of the Pearl River Delta high-speed rail network will take away four million air passengers from airlines between 2011 and 2015. Guangdong Provincial Airport Group chairman Lu Yesheng, following the opening of the Wuhan-Guangzhou HSR link in 2009, stated the number of services between the two cities declined by 80%. Shenzhen Airport estimates HSR has reduced passenger numbers by up to 600,000 p/a.
Further adding to the airlines’ woes is that the HSR routes are also some of the most profitable for China’s airlines, such as the Beijing-Shanghai sector, which witnessed the implementation of a USD33 billion HSR link in Jun-2011. All three of the major state-owned airlines have cited high-speed rail as a major factor affecting their load factors and earnings and are now seeking a way forward.
The leader in the field of rail-speed cooperation is Deutsche Bahn. With its Rail&Fly product, which acts an an interline agreement of sorts between Deutsche Bahn and its airline partners, the rail provides operates codeshares with over 70 airlines. It offers rail services from/to 16 airports (Basel, Berlin-Sch?nefeld, Berlin-Tegel, Bremen, Dortmund, Dresden, Düsseldorf, Frankfurt, Hamburg, Hannover, Leipzig-Halle, K?ln-Bonn, München, Münster-Osnabrück, Nürnberg and Stuttgart to/from the entire DB rail network, covering approximately 34,000km of track and over 500 routes.
At more than 8300km, the burgeoning high-speed rail network was already the world’s most extensive by the end of 2010, with as much of 3500km of new high-speed rail lines to be constructed in 2012. By 2015, China’s high-speed rail network will span 25,000km. The four main north-south routes, including between Beijing and Guangzhou, will be completed in 2012, according to People’s Daily, meaning further competition is expected with the domestic air travel network in 2013 and onwards.
Some estimates put the loss in revenue for China’s aviation industry from the HSR, from reduced traffic and price pressure, at up to 3-4% of total revenues. CAAC director general Li Jiaxiang has said some 50% of flights less than 500km in length and about 20% of flights between 800km and 1000km could become unprofitable as a result of HSR competition. Sectors above 1500km are not likely to be threatened.
Meanwhile, the five airports in China’s Pearl River Delta region met in May-2012 and forecast the development of the Pearl River Delta high-speed rail network will take away four million air passengers from airlines between 2011 and 2015. Guangdong Provincial Airport Group chairman Lu Yesheng, following the opening of the Wuhan-Guangzhou HSR link in 2009, stated the number of services between the two cities declined by 80%. Shenzhen Airport estimates HSR has reduced passenger numbers by up to 600,000 p/a.
Further adding to the airlines’ woes is that the HSR routes are also some of the most profitable for China’s airlines, such as the Beijing-Shanghai sector, which witnessed the implementation of a USD33 billion HSR link in Jun-2011. All three of the major state-owned airlines have cited high-speed rail as a major factor affecting their load factors and earnings and are now seeking a way forward.
The leader in the field of rail-speed cooperation is Deutsche Bahn. With its Rail&Fly product, which acts an an interline agreement of sorts between Deutsche Bahn and its airline partners, the rail provides operates codeshares with over 70 airlines. It offers rail services from/to 16 airports (Basel, Berlin-Sch?nefeld, Berlin-Tegel, Bremen, Dortmund, Dresden, Düsseldorf, Frankfurt, Hamburg, Hannover, Leipzig-Halle, K?ln-Bonn, München, Münster-Osnabrück, Nürnberg and Stuttgart to/from the entire DB rail network, covering approximately 34,000km of track and over 500 routes.
Key Words：High-speed,rail,operations