(Yicai Global) Sept. 7 -- As the high-speed rail (HSR) transportation network gradually develops in China, short-haul flights have suffered severely. Airlines' are responding by increasing ticket discounts, adjusting routes and diverting operations toward the long-haul market.
"With ever more HSR routes of less than four hours opening, short-haul flights have been seriously affected," says Lin Zhijie, a civil aviation professional. As the HSR network further expands, it will cover more medium-haul routes of around 1,000 kilometers, leaving even less market share for airlines.
Mr. Lin says that planes are generally two hours faster than high-speed trains in the medium-haul, but the latter has a stronger appeal to tourists and those visiting relatives due to lower prices and higher punctuality rates, despite longer travel times. HSR has a 40 percent market share in Europe. Since HSR tickets are significantly cheaper in China than Europe, it poses stronger competition for airlines in the Chinese tourist and family-reunion traveler market.
However, air travel is still the top choice for government and business travelers, Mr. Lin adds.
Statistics by Travel Sky (travelsky.net) show that 35 airlines now operate flights affected by high speed rail, and 34 base airlines have their base airports built in cities covered by HSR services.
In response to the competition from HSR, countermeasures adopted by airlines mainly include transport capacity cuts, discount promotions and route adjustments. For example, the number of flights from Beijing to Zhengzhou fell from eight to six, and ticket prices dropped 10-40 percent within 10 days after the launch of the Beijing-Guangzhou high speed train. Similar strategies were also in place for Beijing-Wuhan and Beijing-Changsha flights, though, the measures failed to deliver as hoped as volume for Beijing-Zhengzhou flights still dropped 44 percent, while that for Beijing-Wuhan and Beijing-Changsha fell 22 percent and 14 percent, respectively.
Zhengzhou, Wuhan and Changsha are all located along the HSR line from Beijing to Guangzhou.
Lin said that with long-haul journeys of around 1,500 kilometers, high-speed trains are slower and less competitive, and only pose a limited threat to airlines. For example, the high-speed train from Qingdao to Harbin takes 11 hours and 23 minutes, much longer than the one hour and 45 minutes by air travel; a second-class train ticket costs USD100 (CNY668), only 30 percent cheaper than the original flight price, making competition with airlines almost impossible.