CHINESE AIRLINES LOOK TO JV WITH THE RAIL COMPANIES

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By TESTCustomwebLP TESTCustomwebLP November 22, 2010 20:46

CHINESE AIRLINES LOOK TO JV WITH THE RAIL COMPANIES

Following on from the interest expressed last month from Air France-KLM in several European rail companies Chinese airlines have now indicated a willingness to work with their national railway operators as a way to hedge against the high speed easy access trains of the future.

China’s rapidly expanding high-speed rail network will eventually cover 60% of the market currently held domestic airlines.

When the Chinese rail companies take delivery of new high speed stock it will force local airlines to make decisions, they will be forced to simplify the check in process and take the risks, purchase new regional aircraft and adopt a low cost model and that is before they consider competition in the air.

It is therefore logical that the country’s airline industry has called for a combined air and rail transportation network. Through their cooperation, China’s airlines and railway operators will offer tickets for travel that will only require passengers to check their luggage once during their entire journey. Some airlines plan to submit a proposal to establish a combined air and rail transport system and comprehensive transportation junctions to the Civil Aviation Administration of China.

This news once again shows that China is at the vanguard of modern integrated transport thinking, airline executives elsewhere in the globe will sit back and wonder why they are not being given access to buy up the rail companies. In the end it may come down to the fact that the terrorists, and their constant fascination with commercial aviation, have made security arrangements so very tight that rail travel for many is the very best option as in many cases it will be faster and easier.

Where the travel range is less than 800km and does not involve crossing seas the train will have the edge. Airlines in all regions need to ready themselves or develop a low cost strategy for regional routes as high speed rail arrives. Obviously at this point maybe we should all consider the possibility that rail companies will buy regional airlines. We also have to consider the long term future of regional aircraft such as the Sukhoi Superjet 100.

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By TESTCustomwebLP TESTCustomwebLP November 22, 2010 20:46
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