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HONG KONG SAR –\u00a0Media
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And nowhere has this boom been more apparent than in China,
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The fast pace of growth in these rival sectors in China
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“While it’s true that both flight volumes as well as
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“This has made high speed rail a really attractive way
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Shorter
The research, which was carried out in collaboration with
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They compared the length of delays for flights to 11 cities
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These results were stronger for airlines did not operate on
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The
Whereas high speed rail has operated in different parts of
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And the country is not done. China is seeking to almost
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Going back to the latest study, the researchers then sought
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“There’s
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The researchers found that the coming online of high speed
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“Everyone knows it’s hell to sit on the tarmac waiting
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The study also found a 1.39-minute reduction in average
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Quantifying
By looking at flights on specific dates and times, Prof.
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Using the estimates of the time saved, the researchers
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When this number was applied to the outbound Beijing
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“We live in an age where the price of a train ticket is
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Reference:<\/b><\/p>\n
Fang,
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This
\nOutReach<\/a>\u00a0– 17 June 2021 –\u00a0<\/b>Trains are making a comeback. After losing ground for
\ndecades to the far sexier and faster travel by plane, people are increasingly
\nmaking a return to good old fashion rail as a viable mode of getting around (at
\nleast for short to medium distance trips), thanks in part to rising concerns
\nover the impact of air travel on global carbon emissions as well as the coming
\nonline of more and more high speed rail which has made travel by train faster
\nand more comfortable.<\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nwhich in the space of just over a decade has built the longest
\nhigh speed rail network<\/a> in the world, stretching nearly
\n38,000 km and accounting for two-thirds of all high speed rail track in the
\nworld. This boom has also been mirrored in air travel, with the sector in China
\ntransporting a record
\n660 million passengers<\/a> in 2019 before the pandemic hit.<\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nprovided a group of researchers with the ideal conditions to study how this
\nsecond coming of the golden age of rail has affected airlines. The study,
\ntitled Competition
\nand Quality: Evidence from High-Speed Railways and Airlines<\/a>,
\nfound that the rise in high speed rail led to a significant improvement in
\nairline services, mainly in the form of reduction in flight delays.<\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nairline choice has grown dramatically in recent years as China’s aviation
\nmarket has opened up, it’s also no secret to anyone who’s been through an
\nairport in the country that serious flight delays are a chronic problem,”
\nsays Yang
\nYang<\/a>, Assistant Professor at the School of Hospitality and
\nTourism Management at The Chinese University of Hong Kong (CUHK) Business
\nSchool and one of the study’s co-authors.<\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nfor people to get around between cities, and it was an opportunity for us to
\nstudy how competition between the two modes of transportation affected airline
\nservice quality.”<\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nFlight Delays<\/b><\/p>\n
\n
<\/p>\n
\nProf. Hanming Fang at the University of Pennsylvania and Prof. Long Wang at
\nShanghaiTech University, looked at close to 900,000 non-stop domestic flights
\nfrom Beijing by 41 airlines to 113 destinations between 2009 and 2012. To
\nmeasure service quality, the researchers focused on flight delays in arrivals
\nand departures, as well as travel time.<\/p>\n
\n
<\/p>\n
\n
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\nthat are also served by the Beijing Shanghai High Speed Rail, a 1,318-kilometre
\nlong track, to flights that that were not served by the line. The study found
\nthat the entry of this high speed track in 2011 led to a reduction of an
\naverage of 2.54 minutes in delays in flight arrivals. It also found that the
\nlaunch of high speed rail services led to a 2.5 percentage point-reduction in
\narrival delays of 15 minutes or more.<\/p>\n
\n
<\/p>\n
\n
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\nthe hub model (such as budget carriers that fly point-to-point) and which have
\nless market power, as well as flights on short and medium distance routes.<\/p>\n
\n
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\n
<\/p>\n
\nNeed for (High) Speed<\/b><\/p>\n
\n
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\nthe world for decades, (Japan’s Shinkansen<\/i>,
\nthe world’s first high speed rail system, began in 1964, whereas France’s TGV
\nlaunched in 1981) China only really got into the game well after the turn of
\nthe millennium. While planning reached back as early as the 1990s’, it was not
\nuntil 2008 that the country launched its first high speed passenger-only
\nservice between Beijing and Tianjin, comprising of a 117-kilometre line. The
\nboom that followed saw tens of thousands of kilometres of high speed track laid
\nin the following decade in a network that now covers nearly every single
\nprovince and region.<\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\ndouble its high speed network to around 70,000
\nkilometres<\/a> by 2035. Also, while train speeds have increased from a
\nmaximum of 200 kilometres per hour to 350 kilometres per hour, the country is
\npouring resources into developing even faster rolling stock, including a Maglev
\nprototype<\/a> that is capable of reaching up to a blistering 620
\nkilometres per hour.<\/p>\n
\n
<\/p>\n
\n
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\nto find out whether the reduction in flight delays following the launch of a
\ndirectly competing high speed rail service was due to direct efforts by an
\nairline company to improve the quality of its service, or whether there was
\nsome other external variable at play.<\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nonly so many ways an airline can reduce travel times,” says Prof. Yang, adding that for example it was difficult
\nto reduce flight times without sacrificing safety or buying a completely different
\nmodel of aircraft.<\/p>\n
\n
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\n
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\nrail led to a reduction in delays in flight departures of an average 5.28
\nminutes, leading them to suggest that the entry of competing high speed rail
\nservices drove airlines to directly speed up checking-in and boarding
\nprocesses, as well as by improve training for crew.<\/p>\n
\n
<\/p>\n
\n
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\nfor a plane to take off,” says Prof. Yang. “Airlines can see that if
\ntheir market is about to be encroached by high speed rail that they should
\nfocus on getting their passengers off the ground as quickly as possible.”<\/p>\n
\n
<\/p>\n
\n
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\nrunway taxiing times at the destination airport, although the researchers noted
\nwas something that airlines are unlikely to be able to control.<\/p>\n
\n
<\/p>\n
\n
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\nthe Benefits<\/b><\/p>\n
\n
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\nYang and her collaborators also eliminated a slew of alternative explanations
\nfor the improved timeliness by airlines, from reduced air passenger and airport
\ncongestion as a result of increased transportation volumes, to restructuring in
\nflight schedules.<\/p>\n
\n
<\/p>\n
\n
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\nroughly calculated that the launch of competing high speed rail services would
\nhave conservatively saved passengers an aggregate of just under 2,100 Chinese
\nyuan per flight.<\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\ndestinations that were also served by the Beijing-Shanghai line, it means that
\nthe introduction of just this one line would have translated to total passenger
\nsavings of 15.72 billion yuan, assuming that that airline travellers flying out
\nof Beijing purchased a round-trip ticket and a discount rate of 5 percent, and
\nthat comes even without taking into account reductions in airfare as a result
\nof increased competition.<\/p>\n
\n
<\/p>\n
\n
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\nstill cheaper than flying, but the time cost of travelling by train is fast
\ndropping,” adds Prof. Yang. “The findings speaks volumes about the
\ndisruptive competition that high speed rail represents to air travel.”<\/p>\n
\n
<\/p>\n
\n
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\n
<\/p>\n
\nHanming and Wang, Long and Yang, Yang, Competition and Quality: Evidence from
\nHigh-Speed Railways and Airlines (June 26, 2020). PIER Working Paper No.
\n20-022, Available at SSRN: https:\/\/ssrn.com\/abstract=3636308<\/a> or http:\/\/dx.doi.org\/10.2139\/ssrn.3636308<\/a><\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\narticle was first published in the China Business Knowledge (CBK) website by
\nCUHK Business School: https:\/\/bit.ly\/3g0CC2l<\/a>.<\/p>\n
\n
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