Chairman Si Xianmin said, at a conference in Beijing, that traffic may fall by more than half on 518 of the carrier’s weekly flights. Of the airline’s 160 domestic routes, 38 will compete directly with high-speed railway lines.
Note this is already happening. China Southern’s traffic on flights between Beijing and Taiyuan in Shanxi province fell about 60% after a high- speed rail link began operations, Si said. There was a 30% decline on Shanghai-Wuhan trips, he said.
He said, “This will force us to expand overseas routes, on which we still have some competitive edge. It will eventually cause an impact on the global aviation industry.”
The differences between the two experiences are dramatic. With rail you do not go through all that check in nonsense nor yet security. And the station is normally in the center of town.
Given parity of pricing — and rail promises to always be cheaper than air —- you can work on the basis that a journey has to be over 500 km before air has the advantage, possibly much further. An example: a five-hour rail trip from Shanghai to Beijing, for instance, will probably be about RMB700 ($103), or about 60% of the price asked for the two-hour flight. But to that two hours flight time must be added at least an hour at each end dealing with the airport.
The new rail network, due to be completed by 2020, will offer a cheaper and pleasanter alternative on routes covering about 80% of China’s domestic aviation market.
Which means for Chinese air carriers the only possibility of expansion will be overseas. To be effective there it has to totally change its approach to inflight cabin service, which is pretty close to the bottom of the scale.
Bloomberg reports that Chairman Si Xianmin said, “Airlines will lose all their current competitiveness, like saving time. What’s more, the high-speed trains haven’t reported any fatal accident in the past more than four decades. That’s definitely a plus for passengers considering a trip by air or rail.”