Intermodal competition between air and rail
This paper examines intermodal competition between air travel and (high speed) rail. Three methods are used: literature review, ex-post empirical evidence and a survey. Literature research shows that air travel and rail travel are substitutes on distances greater than 200 kilometres. How long it takes to cover a certain distance by train is highly dependent on geography and the available infrastructure. Most people who travel by train do so because it is fastest, price seems to be less important to them. High-speed trains therefore compete mostly with full-service airlines; Low-cost carriers serve a different segment of the market. The empirical model developed in this paper shows that, as travel time by train gets lower, market share increases by around 0,3% per minute of travel time by train. When travel time by train is around 4 hours, both modes of transport capture roughly half of the market. It seems that this is longer than it was before. The case study conducted focussed on the recently introduced Eurostar service between Rotterdam and London and its competition with British Airways’ flight between Rotterdam and the London City airport. A survey was conducted among 24 customers of the flight to London. The results show that the majority of them are business travellers and that time is the most important factor in choosing the plane for those business travellers. Leisure travellers on the other hand indicate that price is the most important factor for them. Research also shows that al lot of passengers of the Rotterdam-London flight would consider taking the plane in the future.