China has been heavily investing in railway lines, with US$48 billion spent on railway construction in 2008. The announced infrastucture stimulus package may deliver an additional 50% increase in railway construction spending in 2009.
According to state media, the country currently has over 79,000 kilometers of railroad tracks and by 2020 plans to add an additional 120,000km, of which 16,000km will be dedicated to passenger service.
Train services in China, as in many other countries, are competing against air travel on several fronts. Not only are ticket prices a factor, but also journey times, frequency of departures, comfort, and overall convenience.
"The customer experience is becoming a more important factor in the decision to fly or take the train," said Paul Priestman, founder and director of Priestmangoode, a British design consultancy that will work on a new Beijing-Shanghai high-speed train design together with Sifang, a Chinese engineering company.
Although China Railways is the main operator of China’s high-speed express trains, there are a few public-private partnerships. Starting April 2009, Tangula Luxury Trains will organize five day trips to Tibet from Beijing using its own rolling stock. The project is operated by the Tangula Group, a joint-venture of foreign businesses, including German hotel group Kempinski and a mixture of Chinese private and public enterprises.
Need for speed
High-speed trains have a minimum speed of 200km/h, and most of China’s new high speed express trains clock in at over 300km/h. The new Beijing to Shanghai passenger express line should be operational by 2013, and will travel at 350km/h, arriving in approximately five hours, half the travel time of the current express trains and competitive with flight times.
"Eurostar has proven to be quicker than the plane in Europe," said Priestman. "Train passengers don’t have to arrive hours before departure."
Priestman added that the Beijing-Shanghai line will sport even greater comfort for business travelers. Although specifics cannot be disclosed at the moment due to a non-disclosure agreement, he said the design "will focus on the customer and operational aspects."
High-speed trains in China generally have a business class catering to the needs of business travelers, a coveted market willing to pay for extras, said Yi Tang, manager of Excursion Travel, a Shanghai-based travel agency.
"There are fewer people in business class on trains," said Yi. "Unlike economy class, overbooking isn’t allowed."
The price factor
A business class seat on a high speed train sets travelers back an additional 20% compared to economy class. However, the cost of a business-class ticket on a high-speed train remains cheaper than that of a business-class plane ticket on the same route. A round-trip business class train ticket between Beijing and Shanghai on the current express train will cost approximately US$150, while a business class flight usually costs one-third more, according to Yi.
Train travel does have several restrictions, though. First of all, rail passengers aren’t allowed to change the date of their trip, with refunds available up to 10 minutes before departure.This means passengers are left with worthless tickets if they miss their train, unlike air travelers who can generally get a refund on missed flights for a fee – or catch the next flight.
Regardless of travel class, train passengers do not receive a meal with their ticket; passengers either pay for food onboard or bring their own. However, it is much easier for trains to add or improve food options than airlines.
However, while high-speed trains may compete with airlines short-range routes, it is doubtful that they will be able to compete with airlines for long range travel.
"China is a big country," said Brian Foley, president of aviation consultancy Brian Foley Associates. "I don’t see rail as anywhere close to being a competitor." Even so, given the current financial straits of most Chinese airlines, new competition on any front is unwelcome.