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Airlines’ reaction to high-speed rail entries: Empirical study of the Northeast Asian market

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  • Wan, Yulai
  • Ha, Hun-Koo
  • Yoshida, Yuichiro
  • Zhang, Anming
Abstract
We investigate the impact of the commencement of high-speed rail (HSR) services on airlines’ domestic available seats on affected routes in China, Japan, and South Korea. The study is based on a dataset covering the 1994–2012 period. We use the propensity score matching method to pair HSR affected routes with routes without HSR services. The difference-in-difference approach is used to estimate the impact of HSR entry. We find that HSR entries may, on average, lead to a more significant drop in airlines’ seat capacity in China than in Japan and Korea given similar HSR service speed. In China, HSR services with a maximum speed about 200km/h can produce strong negative impacts on medium-haul air routes but induce more air seat capacity on long-haul routes. HSR services with a maximum speed of 300km/h have little extra impact on medium-haul routes but a strong negative impact on long-haul routes. Finally, although HSR has a strong negative impact in Japan’s short-haul and medium-haul air markets, little impact is observed in its long-haul markets.

Suggested Citation

  • Wan, Yulai & Ha, Hun-Koo & Yoshida, Yuichiro & Zhang, Anming, 2016. "Airlines’ reaction to high-speed rail entries: Empirical study of the Northeast Asian market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 532-557.
    • Handle: RePEc:eee:transa:v:94:y:2016:i:c:p:532-557
    DOI: 10.1016/j.tra.2016.10.014
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