High speed rail has been undeniably successful for China. So successful, in fact, that it’s putting a massive dent in the airline industry. BusinessWeek reports:
China Southern Airlines Co., the nation’s largest carrier, and Air China Ltd. are slashing prices to compete with the country’s new high-speed trains in a battle that Europe’s airlines have largely already ceded.
Competition from trains that can travel at 350 kilometers per hour (217 miles per hour) is forcing the carriers to cut prices as much as 80 percent at a time when they are already in a round of mergers to lower costs. Passengers choosing railways over airlines will also erode a market that Boeing Co. and Airbus SAS are banking on to provide about 13 percent of plane sales over the next 20 years.
There’s really just nothing the airlines have that HSR doesn’t — the latter has larger and more comfortable seats, the stations often more centrally located, it’s easy to get to smaller cities, and the travel times are edging closer to equal.
Plus, given China’s notoriously inefficient and unreliable air travel system — one traveler was quoted in the story as saying, “This is China; you make plans based on the assumption that you won’t get there on time” — rail’s steady schedules and few delays are only upping its attractiveness for travelers. In fact, the only way airlines can really compete is through ticket prices — and they’re lunging at this opportunity, with China Southern slashing economy-class tickets to 140 yuan ($21) on flights between Guangzhou and Changsha. You may recall that the Guangzhou line has cut travel times dramatically, with the trip to Changsha going from 9 hours to 2.5.
Of course, this isn’t to say that air travel in China is in any danger of annihilation — the country’s 8.7% economic growth means that 90 billion yuan are being invested in airport and aviation facilities this year — a 50% increase from last year. Plus 25 new airports, including a second one in Beijing, will begin construction this year.
Still, high speed rail has fully infiltrated the population, and it’s only getting bigger — by 2020, there will be HSR lines connecting every Chinese city with more than 500,000 residents, meaning that 90% of the country’s population of 1.3 billion will have HSR access. Food for thought.
February 10th, 2010 at 1:29 pm
A somewhat off-topic comment here…
There was an interesting program on Frontline last night where they talked about how the major airlines are contracting more and more work to the regionals. The difference is that the regionals have less experienced crews and seem to be taking many shortcuts in order to keep the flights in the air.
To the majors, the difference is cost. The younger flight crews don’t earn as much as the older more experienced crews that still work for the majors. So more and more flights are being shifted over to the regional carriers.
February 10th, 2010 at 1:34 pm
It seems like major new Airport expansion programs should be tabled and that money invested in HSR. Chicago would be way better off spending 15B+ on HSR than on the runway expansion that they’re thinking of doing right now at ORD. (for example)
February 10th, 2010 at 2:11 pm
You should update the final paragraph to say that “by 2020, there will be HSR lines connecting every Chinese city with more than 500,000 residents, meaning that XX% of the country’s population of Y.Y billion will have HSR access.” The country already has more than 1.3 billion people, so what’s the population projection for 2020?
@Allan, the runway expansion has already begun. The bulldozers started clearing a couple years ago what the City owned, and will only clear more. A new runway opened last year, to which the FAA attributed a slight decrease in national delays.
February 10th, 2010 at 2:23 pm
Allan, in regards to what you suggest, I agree, I would rather see 15 billion to build out a high speed rail system in the Midwest, but in reality the money is nontransferable. Hypothetically, the expansion will pay for itself by having higher fees in the future to repay bonds that are financing it now. I don’t think the city could get bonds for high speed rail though since the airport expansion cost is being shouldered by the city of Chicago. It would be crazy for the city to pay for the expansion across the Midwest when they wouldn’t get to keep all the revenue from the system and would be subsidizing infrastructure in many other states.
February 10th, 2010 at 2:26 pm
Did you notice the bridge to Taiwan? Is that for real?
February 10th, 2010 at 2:42 pm
Do you have a link to a larger version of that China 2020 map? Thanks…
February 10th, 2010 at 4:37 pm
Try this :
http://www.skyscrapercity.com/showthread.php?t=446695
(From 28 Feb.’07)
February 10th, 2010 at 4:59 pm
@francis: I believe it is for real, they will also be going over to Hong Kong and Macau if I recall correctly.
I wonder in 2020 what we will have? At the current rate of events I say pretty much the same, maybe a few upgrades but nothing major not even CAHSR.
February 10th, 2010 at 9:55 pm
The HSR tunnel to Taiwan is pure fantasy stuff
February 10th, 2010 at 10:15 pm
A 100 mile tunnel? Yeah, I’m gonna agree with Irwin.
Also, wouldn’t most agree that eastern china, being the motherload of population density (over a billion in eastern china, and area about half the size of the US), is the perfect type of place for HSR? A place where HSR makes economic sense, unlike most of the US?
February 10th, 2010 at 11:28 pm
That link to Taiwan is only there for political propaganda reasons. No government on Taiwan - KMT or DPP - would allow a physical link between the PRC and Taiwan proper (excluding Kinmen which is already planning to build a bridge to Xiamen). As previously stated - pure fantasy stuff by the PRC.
February 11th, 2010 at 6:47 am
It is presumptuous to use these preliminary numbers for any kind of future projections. Right now everyone is excited to try the new high speed rail and the “pride of China.” Wait a year or so and this excitement will settle out, then we’ll see find out what the real balance is between HSR and airlines in China.
Also, I have not found Chinese airlines to be any less reliable than those in the US or elsewhere. I think that commenter just has an axe to grind because of his isolated bad experience.
February 11th, 2010 at 8:10 am
Yea, there was talk of China considering 4 potential crossings to Taiwan. At 150 km its 3 times the length of the channel tunnel between the UK and France give or take. The cost would be ridiculous for one and Taiwan’s main concern if some kind of crossing were built would be their national security. Highly unlikely although it would be impressive if it were attempted
February 11th, 2010 at 10:14 am
[...] China HSR Network So Good It’s Hurting Country’s Airlines (Infrastructurist) [...]
February 11th, 2010 at 11:20 am
[...] By 2020 90% of China’s 1.3 billion people will have access to High Speed Rail, but in California, I’m sure we’ll still be fighting about whether to build a line at all INFRASTRUCTURIST [...]
February 11th, 2010 at 11:58 am
[...] China HSR Network So Good It’s Hurting Country’s Airlines (Infrastructurist) [...]
February 11th, 2010 at 2:38 pm
[...] [Via Infrastructurist] [...]
February 11th, 2010 at 11:11 pm
“It seems like major new Airport expansion programs should be tabled and that money invested in HSR. Chicago would be way better off spending 15B+ on HSR than on the runway expansion that they’re thinking of doing right now at ORD. (for example)”
Do both. We haven’t built a new airport since Denver. Our highways are falling apart, too. We spend 2% of the federal budget on transportation infrastructure.
February 12th, 2010 at 2:25 pm
[...] story from Bloomberg (h/t Infrastructurist) puts Chinese HSR’s success into perspective: China Southern Airlines Co., the nation’s [...]
February 12th, 2010 at 5:16 pm
[...] HSR projects hurting air travel, [...]
February 13th, 2010 at 11:46 pm
[...] and this column on the same subject from Bob Herbert, has spurred quite a bit of commentary in the blogotubes, including this perhaps hyperbolic declaration from Open Left that China is now the most advanced [...]
February 15th, 2010 at 11:26 pm
China will end up using its new airport infrastructure for overseas flights. The decline of the domestic airlines really just leaves more room for flights to Japan, Australia, the US, et cetera. And Korea, at least until North Korea collapses. And it will probably take quite a while before the trains get to Vietnam, and Europe is too far away until the Trans-Siberian is massively upgraded, and so on and so on — so I think China’s airport expansions will end up being used even though China’s domestic airlines will collapse; China will have a LOT more international direct flights.
March 19th, 2010 at 9:31 pm
Guys, if you think a 100km tunnel is fantasy stuff, I’d like to let you know that China and South Korea is also proposing a tunnel to connect them together with HSR. When the project finishes, from Seoul, it will take only two hours to get to China and four hours to get to Beijing.
The sky is the limit, frogs, please open your eyes and look at the world.