The Impact of High-Speed Rail on Chinese Airlines, Term Paper Example

China’s economy and need for efficient forms of mass transportation has grown consistently since 2004. As of 2011, 6,000 billion U.S. dollars were spent by more than 30,000 consumers. Despite this upward trend, consumers clearly prefer to use the high-speed rail over airlines; airlines only have 14% of the GDP for this industry, while high-speed rail has the remaining 86%. These figures demonstrate that there is a large market potential for mass transportation in the future because both the airline industry and the high-speed rail industry continue to grow. This information clearly demonstrates that the high-speed rail is making more money as a form of transportation than airlines in China. For the airline industry to compete, it needs to reconsider many aspects of business, which begins with determining why the high-speed rail industry is more popular.

While Chinese airlines and the high-speed rail industry co-exist and both modes of transportation are necessary, it is clear that the two must interact on a variety of economic levels. A major consideration of this interaction is the routes that high-speed rail and airlines take their passengers and freight. Chinese airlines are limited in the places they are able to travel based on the availability of airports. Although the routes are somewhat accommodating, they do not typically take passengers to their final destination, which usually requires some form of additional travel after the flight is completed. In addition, flying by air is inconvenient usually because of organizational problems at the airports themselves. Flying would be a more efficient mode of transportation compared to high-speed rail if planes took off and landed when they were announced and if there is a quick way to travel to and from the airport. However, this does not usually occur; even though the flight itself is quicker, the extraneous factors that are involved in flying make the mode of transportation inconvenient compared to other available options.

In contrast, high-speed rail companies such as Eurostar and Shinkansenconnect many cities that may be directly inaccessible by air and require layovers. In China, the high-speed rail currently connects 90% of the 1^st tier cities and 50% of the second tier cities. This is more connections than would be possible with airline flights due to operating expenses. Unlike the airline industry who generally keeps their flight paths unchanged, the high-speed rail companies are continuously adding tracks to go to new destinations. In fact, it is expected that the high-speed rail will reach 18,000 kilometers by 2020.

While it is clear that an airplane is capable of traveling faster than a train, studies have shown that when an airplane and a train are carrying a medium haul, the travel time of the two modes of transportation is equal within a one hour gap. When the trip is a short haul, the high-speed rail is actually more efficient and can bring customers and freight to their location more quickly than an airline. A lot of the difference in travel time accounts not for the flight speed of the plan compared to high-speed rail, but the amount of time it takes for the plane to hit maximum speed. A train is capable of accelerating more quickly to its maximum speed compared to a train, which accounts for its ability to arrive at its destination more quickly for certain kinds of trips.

Another disadvantage that the airlines have over high-speed rail is that the rail offers trips more frequently and that the trains are typically able to carry a greater amount of passengers. As a consequence, high-speed rail customers don’t have to worry about overbooking or not getting a seat compared to those who commute by air. Despite this, it is still better to take an airplane in some situations. Airplanes are necessary for efficiency if the trip would be longer than four hours by plane, whether the distance of the trip exceeds 12,000 kilometers, or whether the trip involves crossing geographical features that would be difficult for a train. Trips shorter than this by about an hour cause a grey area; it may be of equal efficacy to take a train or airplane. Trips that are about 2 hours long or up to 500 kilometers however should be taken by train for optimal transportation.

In conclusion, while high-speed rail is clearly more efficient than airlines for many purposes, traveling by airline is necessary for longer trips and for accessing places that are surrounded by a large number of geographical areas. Despite this, airlines need to remain competitive with the high-speed rail by adjusting many aspects of their business. Firstly, it is essential for them to lower their ticket prices so that they are at least comparable with the rail. Second, airlines could make their travel experience more luxurious and comfortable compared to the rail by offering additional services such as food and drink. Lastly, airlines should attempt to reduce travel time by arguing for the development of more airports in more locations and organize the flight times so they avoid delays that add unnecessary time to the trip.