Effects of Beijing-Shanghai high-speed rail on air travel: Passenger types, airline groups and tacit collusion

Ma, Wenliang and Wang, Qiang and Yang, Hangjun and Zhang, Anming and Zhang, Yahua (2019) Effects of Beijing-Shanghai high-speed rail on air travel: Passenger types, airline groups and tacit collusion. Research in Transportation Economics, 74. pp. 64-76. ISSN 0739-8859


Abstract

This paper analyzes the effects of the busiest and most profitable high-speed rail (HSR) line in China — the Beijing-Shanghai HSR — on the aviation markets paralleling this HSR line. In general, we find that both airfare and air travel demand decreased significantly after the entry of the Beijing-Shanghai HSR. In particular, economy-class airfares dropped more than business-class fares did, while the decline in the demand for business-class travel was larger than it was for economy-class travel. The frequency of and the number of seats on the HSR line were significantly and negatively associated with air travel demand, especially with demand for business-class travel. Our results show that the entry of the HSR line led to airfare convergence on the Beijing-Shanghai airline route, which might indicate the existence of tacit collusion among the operating carriers. Governments, airlines and airport authorities need to work together to improve the on-time performance of this profitable route which is currently plagued with frequent flight delays.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Files associated with this item cannot be displayed due to copyright restrictions.
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Commerce (1 July 2013 -)
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Commerce (1 July 2013 -)
Date Deposited: 28 Jan 2020 06:43
Last Modified: 30 Jan 2020 05:55
Uncontrolled Keywords: High-speed rai, lAir transport, Business class, Economy class, Beijing-Shanghai, Tacit collusion
Fields of Research : 15 Commerce, Management, Tourism and Services > 1507 Transportation and Freight Services > 150701 Air Transportation and Freight Services
14 Economics > 1402 Applied Economics > 140209 Industry Economics and Industrial Organisation
14 Economics > 1402 Applied Economics > 140217 Transport Economics
Socio-Economic Objective: B Economic Development > 88 Transport > 8803 Aerospace Transport > 880302 Air Passenger Transport
Identification Number or DOI: 10.1016/j.retrec.2018.12.002
URI: http://eprints.usq.edu.au/id/eprint/37456

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