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Airlines maintain flight frequencies despite increased competition from high-speed rail
The European Union supports high-speed rail as a sustainable form of transport and how market liberalization can help promote its development. Spain is one of the few countries where this measure has been implemented. In 2020, the market was opened to competition on the main high-speed rail corridors: Madrid–Barcelona, Madrid–Valencia, Madrid–Alicante, Madrid–Seville and Madrid–Málaga. As a result, both the supply of services and passenger demand increased. On these routes, the frequency rose from 78 to 115 journeys a day and the number of seats increased by 60% (from around 24 million in 2019 to around 37 million in 2023). As for demand, it rose by up to 45% (from around 20 million passengers in 2019 to over 30 million in 2023).
These positive results of liberalization increased the market share of high-speed rail to over 80% on most routes compared with air travel on those routes where the two modes compete. Airlines responded to this competition by reducing seating capacity, replacing some aircraft models with others of lower capacity. However, flight frequency remained unchanged.
“The significant increase in high-speed rail services in Spain following liberalization has not led to a reduction in the number of flights,” the three authors of the article conclude. They are Daniel Albalate, director of the Observatory for the Analysis and Evaluation of Public Policy at the UB; Albert Gragera, professor from the Department of Applied Economics at the UAB; and Pere Suau, head of the Sustainability, Management and Transport Research Group (SUMAT), affiliated with the Digital Transformation and Governance Research Centre (UOC-DIGIT), and professor of Economics and Business Studies.
The liberalization of the high-speed rail market in Spain in 2020 led to an increase in passenger numbers compared with its competitor, air travel. Airlines responded to this increased competition by reducing seat capacity by 10% to 16%, while maintaining flight frequencies to preserve connectivity through their hub airports, according to a study by researchers from the University of Barcelona, the Universitat Autònoma de Barcelona and the Universitat Oberta de Catalunya published in Research in Transportation Business & Management.
The article explains how the European Union supports high-speed rail as a sustainable form of transport and how market liberalization can help promote its development. Spain is one of the few countries where this measure has been implemented. In 2020, the market was opened to competition on the main high-speed rail corridors: Madrid–Barcelona, Madrid–Valencia, Madrid–Alicante, Madrid–Seville and Madrid–Málaga.
As a result, both the supply of services and passenger demand increased. On these routes, the frequency rose from 78 to 115 journeys a day, and the number of seats increased by 60% (from around 24 million in 2019 to around 37 million in 2023). As for demand, it rose by up to 45% (from around 20 million passengers in 2019 to more than 30 million in 2023).
These positive results of liberalization increased the market share of high-speed rail to more than 80% on most routes, compared with air travel on those routes where the two modes compete. Airlines responded to this competition by reducing seating capacity and replacing some aircraft models with others of lower capacity. However, flight frequency remained unchanged.
"The significant increase in high-speed rail services in Spain following liberalization has not led to a reduction in the number of flights," the three authors of the article conclude. They are Daniel Albalate, director of the Observatory for the Analysis and Evaluation of Public Policy at the UB; Albert Gragera, professor in the Department of Applied Economics at the UAB; and Pere Suau, head of the Sustainability, Management and Transport Research Group (SUMAT), affiliated with the Digital Transformation and Governance Research Center (UOC-DIGIT), and professor of economics and business studies.
"This has implications for the promotion of high-speed rail as a more sustainable mode of transport," they add. "Making high-speed rail more attractive through market forces does not appear to be a path that will lead to significant environmental and climate improvements."
They suggest that the cause could lie in the interests of network airlines, "which must maintain high flight frequencies even if it means using smaller aircraft, as many domestic flights feed into the Madrid-Barajas hub. Even with fewer passengers, these flights continue to operate to fill intercontinental aircraft."
"In conclusion, if a market liberalization as successful as that of the high-speed rail network has not been able to reduce the number of flights, it is unlikely that any market dynamics will succeed in doing so," they state. They even argue that "even if, as is intended, Spanish legislation moves toward banning short-haul flights, its impact on the number of flights and emissions would be very limited if connecting flights to hub airports continue to be exempted."
How trains can be an alternative to planes in Europe... The Dutch airline KLM recently launched an advertising campaign called “Fly Responsibly.” Surprisingly, it seems to encourage viewers to travel less. “Do you always need to meet face-to-face?” it asks. “Can you take the train instead of the plane?”
The influence of environmental activist Greta Thunberg likely explains why airlines feel compelled to say these things. “Flight shame”—the feeling of guilt associated with choosing air travel when more sustainable alternatives exist—has left many airline customers feeling uneasy about the aviation industry, which consumes five million barrels of oil a day and is projected to be responsible for about 22% of carbon emissions by 2050.
High-speed rail networks in Europe already offer an alternative to air travel between European countries for distances of less than a thousand kilometers. For longer journeys, so-called “sleeper trains” are becoming increasingly popular. These services run overnight and provide passengers with a bed for sleeping. As more consumers question the ethics of their next flight, railway companies see an opportunity—and competition with airlines is heating up.
But can night trains help offset the international journeys most people currently make by plane?
The revival of European night trains...From 2009 to 2018, the European night train network shrank. The same holds true for conventional intercity rail networks, especially in Southern and Eastern Europe. This made air travel the only alternative on many routes. But that appears to be changing. When the German railway company German Rail decided to discontinue its overnight passenger train network in 2015, the Austrian federal railway (ÖBB) took over some of the services. In 2017, ÖBB’s night service carried approximately 1.4 million passengers, more than doubling its total passenger count from the previous year.
In 2018, ÖBB achieved a further 10% increase in passenger numbers. The company’s CEO, Andreas Matthä, stated that “night services are a viable alternative to short-haul flights” and pledged to continue investing in new services. Consequently, ÖBB is expanding its night train routes. Starting in January 2020, night trains will once again run between Vienna and Brussels, 16 years after the service was discontinued.
In the UK, Great Western Railway plans to refurbish its night trains to Cornwall. The Caledonian Sleeper, which serves London, Edinburgh, Glasgow, and Aberdeen, has been upgraded through a €150 million investment in new trains.
In response to a public petition, the Swedish government plans to reintroduce overnight rail services to other European countries. A night service from Malmö, in southern Sweden, to London is planned for 2022. The service could depart in the evening and arrive in the English capital by lunchtime the following day. Spanning nearly 1,300 kilometers, the trip is an example of the many rail journeys that could replace flights between European countries.
An alternative to air travel? Aviation industry executives are concerned that “flight shame” could threaten passenger traffic, and in some countries, this already appears to be happening. Swedavia, a company operating ten of Sweden's major airports, reported a 4% drop in passenger numbers in 2019 compared to the previous year. The decline was primarily in domestic travel, while the number of international passengers fell to a lesser extent. Despite this, European air traffic grew by 4.2% in 2019.
It is too early to tell whether the resurgence of overnight trains is a permanent trend driven by "flight shame." Nevertheless, environmental awareness continues to influence travelers' choices.
Researchers studying consumer profiles across different markets have recently identified a new type of traveler: the environmentally conscious traveler. People in this category strive to maintain the most sustainable lifestyle possible—and that includes reducing the number of flights they take.
However, researchers found that awareness of the environmental crisis does not automatically translate into behavioral changes, such as choosing alternative modes of transport over air travel. More often, distance and price are more powerful motivators, particularly for short- and medium-haul trips.
Source: University of Barcelona