Chinese Airlines Facing Tough Price Competition from the Train

Posted 14/06/2011

Airlines offering flights between China’s two largest cities, Beijing and Shanghai are bracing themselves from tougher competition after it was revealed that standard tickets on the new bullet train service, which will open this month, will cost a lot less than anticipated.  The country’s Vice Rail Minister, Hu Yaddong, revealed this week that standard tickets will cost from 555 yuan ($86), while premium tickets will be priced from 935 yuan for some slower trains and 1,750 yuan for the high-speed services.  

The new rail link is expected to draw passengers away from the airlines with the 1,318km high-speed line enabling the ground journey to be reduced to five hours, which although still longer than the flying time, could attract some passengers due to the low fares and frequency.  Around 90 services are expected every day carrying around 180,000 passengers initially, but potentially growing to 80 million travellers a year, according to estimates.

There are currently more than 330 weekly flights between Beijing and Shanghai, providing more than 85,000 seats in each direction.  An estimated 6.9 million O&D passengers travelled between the two cities in the past year on flights by Air China, China Eastern Airlines, China Southern Airlines, Hainan Airlines and Shanghai Airlines, with average fares of $159 each way.

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