Recently, China has launched the fastest bullet train in the world that takes passengers between Beijing and Shanghai. This event prompted many experts to become worried about the Chinese airlines. They might begin losing market share in favor of those high-speed trains. Moreover, with this strong domestic competition from the trains, some Chinese airlines might even begin expanding globally. International routes could prove to be much more profitable for the air-carriers as well as opening more opportunities on the foreign market.
According to reports, China’s fastest bullet train between Beijing and Shanghai now travels with 350 km per hour. This is an increase from 300 km per hour, making it the fastest bullet train in the entire world. Now, passengers will only have to spend less than four hours and 30 minutes to arrive at their destination.
Fastest bullet train in the world
The same report is stating that China is also planning to increase the speed of one third of the country’s rails up to 350 km per hour. Experts are saying that by increasing the speed, the rail lines will be an even greater danger to the domestic airlines. People will want to travel in a safer way. Especially with such a level of speed and shorter hours spent on the road.
According to statistics, during the week-long holiday that lasted from October 1 to October 8, ticket bookings for the high-speed rails increased with about 140%. This was especially true for those trains that were travelling to the city of Hangzhou, a common tourist destination. Analysts think that the reason for this could be the fact that flights are usually experiencing delays at the big airports. So, passengers are preferring to take the safe and fast routes towards their destinations.
Competition for domestic airlines
Over the next few years, revenue and passenger volume will be harshly affected by the increasing popularity of the high-speed rail lines. The only solution for airlines to remain relevant would be to start reducing its ticket prices in order to attract passengers. Still, there will be competition and Chinese airlines might begin expanding towards international routes. This could mean more interest from the foreign market and a chance to survive. Especially that the appetite of the Chinese to travel abroad has been increasing recently.
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