The effects of airline and high speed train integration

Canadian pension fund investors in transport infrastructure: A case study

“…In most countries, the opening of new airports or seaports is tightly restricted, especially in existing urban areas, limiting the potential challenge from a new competitor. The risk of substitutability is particularly present in the airport business where the expansion of high-speed rail can provide a viable alternative to short haul airline flights on certain popular routes, particularly in Europe where Canadian pension funds have ownership shares in numerous major airports (Socorro and Viecens, 2013). Yet in Britain where a number of airports are owned by Canadian pension funds and a new high-speed rail line is being proposed, the immediate substitution risk is low as the highspeed rail project is mired in an unpredictable approval process and will take over a decade to be built, if it gets built at all.…”

Would competition between air transport and high-speed rail benefit environment and social welfare?

“…Some contributions have examined airline-HSR cooperation and its potential benefits for the airlines and the society. Again, these are mainly empirical papers (Cokasova, 2006;Givoni and Banister, 2006), while few works have addressed this issue analytically Socorro and Viecens, 2013). Some recent contributions investigate the long-term impacts of high-speed rail competition on air transport studying how the market coverage and the network choice of an airline would respond to HSR competition on origindestination trunk routes (Jiang and Zhang, 2015).…”

“…Travelers maximize a (strictly concave) quadratic utility function as proposed by Singh and Vives (1984). This approach has been used in transport literature (Flores-Fillol and Moner-Colonques, 2007;Oum and Fu, 2007;Socorro and Viecens, 2013). Let q A and q H be the number of passengers traveling by air transport or HSR, respectively.…”

“…The parameter dðxÞ ranges from 0 to 1. If HSR is fully privatized (i.e., x ¼ 0Þ; d is zero and HSR maximizes profit (Adler et al, 2010;Socorro and Viecens, 2013). If HSR is fully nationalized (i.e., x ¼ 1Þ; d is one and HSR maximizes social surplus.…”

Competition in complementary transport services

“…These criteria can clearly be transferred to passenger transport. The complementarity between air transport and high speed rail, and the possible advantages of integrating these two transport modes, has been addressed by Socorro and Viecens (2013). In fact, air transport is an obvious example of an industry where complementarity takes place both between different transport modes and within the same type of transport.…”