Based on the pricing structure, fares range from CNY410 (USD63) to CNY1750 (USD269). One-way fares o

LATEST REPORT: Farnborough 2012 wrap. It may have been Boeing s turn to shine at this year s major European air show, at Farnborough, handsomely out-selling Airbus with orders and commitments for 396 aircraft versus Airbus 115 new sales and commitments, but it was the prominence of aircraft lessors in the order-making that was the real talking point.
The Beijing -Shanghai high-speed railway commenced operations on 30-Jun-2011 and the impact on economy airfares and hence yields on the route have been immediate and significant, with a slump in economy fares of 52% coinciding with the rail launch. However, fares in the higher-yielding and less price sensitive business and first-class markets appear to have remained relatively unaffected.
Ahead of the launch of the high-speed rail network, China Eastern Airlines and several other Chinese carriers denied reports that their recent fare discounts on the Beijing-Shanghai sector are in response to the opening of the Beijing-Shanghai high-speed rail link. According to Qunar, rent a car san francisco a Chinese travel search engine, fares on the lucrative Beijing-Shanghai sector are down by an average rent a car san francisco of 40% to 50% with the lowest fare at a 65% discount at CNY400 (USD62), which is lower than the cheapest ticket for the high-speed rail of CNY410. Ctrip similarly stated that airlines have slashed some ticket prices by up to 65% to below the cost of the cheapest rail pass.
An analysis of ITA fare data reveals rent a car san francisco that fare reductions on the sector rent a car san francisco coincided with the launch of the network, with economy fares slumping 52%. This fare reduction is in marked rent a car san francisco contrast to what occurred prior to the line launch, with fares on the sector increasing over the eight-month period prior to its launch. Economy fares in this period rent a car san francisco were in the USD360 to USD408 range, increasing over this period, but have slumped to between USD268 and USD339 for the Jul/Aug-2011 period, according to ITA data.
In the economy classes, price competition between the modes will continue be intense, rent a car san francisco particularly in periods of lower seasonal demand. Some predictions have high-speed rail capturing between 1.3% and 5.3% of domestic airline passengers annually by 2014 and airline revenues declining by a correspondingly higher 3% to 8%, due to shrinking demand and pricing pressures.
China 's Ministry of Railways Vice Minister Hu Yadong in Jun-2011 announced the pricing structure of the high-speed rail link, with the fares being less than expected, increasing the threat to domestic airlines on the route.
Based on the pricing structure, fares range from CNY410 (USD63) to CNY1750 (USD269). One-way fares on the 250km/h trains will start from CNY410 (USD63) for second-class seats to CNY650 (USD101) rent a car san francisco for first class while fares on the 300km/h trains will start from CNY555 (USD86) for second-class seats to CNY1750 (USD271) for business class.
According to Morgan Stanley , the cheapest tickets on the slower train will cost about CNY0.31 per kilometre compared with other high-speed rent a car san francisco rail lines that charge around CNY0.47 per kilometre for the cheapest tickets. The cheapest ticket on the 300km/h Beijing-Shanghai train is priced at around 35% of monthly disposable per capita income for urban dwellers.
Meanwhile, fares on three existing bullet-train lines ( Wuhan - Guangzhou , Zhengzhou -Xian and Shanghai- Nanjing ) will also be reduced by 5% from 01-Jul-2011 to coincide with the Ministry slowing trains to 300km/h to boost operating costs and increase passenger numbers.
Responding to the pricing structure, China Southern rent a car san francisco chairman Si Xianmin noted that "the fare for the Beijing-Shanghai high-speed rail will be cheaper than airfares, and the travelling time will also be a lot shorter". A flight typically takes two hours, excluding travel time to the airport and check-in time. Additionally, around 25% of Chinese services experience rent a car san francisco delays.
The nation's airlines are gearing up for a fight, maintaining services and improving their product offerings. Capacity between Shanghai ( Pudong and Hongqiao ) and Beijing has increased from a combined 78,833 seats in the week between 30-May-2011 and 05-Jun-2011 to 86,745 seats in the week commencing 27-Jun-2011 to 03-Jul-2011. This is increasing further to 90,533 seats in the week ended 31-Jul-2011.
rent a car san francisco Chinese carriers are also introducing other measures such as offering free shuttle buses to/from airports to entice passengers away from high-speed rail. CAAC Director Li Jiaxiang also stated measures would be taken to shorten the time that passengers spend at airports on security checks and check-in, and improve punctuality. As part of this, airlines are offering high frequency air express services and streamlined passenger rent a car san francisco check-in, including dedicated check-in counters, dedicated security channels and additional services such as accelerated baggage claim areas for passengers.
For more information on the high-speed rail line network, the traffic impact on airlines and airline responses to the HSR, see related article: China s aviation industry to witness 'another blow' with opening of Beijing-Shanghai high-speed rail
The Beijing-Shanghai is a key business route, with business trips accounting for 70-80% of all airline ticket sales on the sector. This should limit the impact of fare reductions, as long as the airline product remains competitive. This trend was noted by China Eastern Airlines rent a car san francisco Co Ltd GM Ma Xulun who stated that while "the number of passengers might be reduced 20 or 30% within half a year, but in a long run it will not affect the airlines rent a car san francisco so much because of diversified demand".
Business-class fares on Shanghai Hongqiao-Beijing sector stood at USD582.60 as at 30-Jun-2011, marking a 60% increase from 28-Sep-2011 levels. Over the past 12 months, business fares on the sector will have increased by 99% up until the end of Oct-2011. Price variations on the Shanghai Pudong-Beijing sector are less extreme, although fares have still increased by 14% over the past eight months, and will have increased by 17% over the 12-month period to Oct-2011.
For first-class fares, fares on the Shanghai Hongqiao-Beijing and Shanghai Pudong-Beijing sectors stood at USD756.60 as at 30-Jun-2011 rent a car san francisco and are remaining stable throughout Jul-2011 and Aug-2011. Fares from Shangahi Hongqiao have increased by 42% year-on-year based on Oct-2011 fare data with increases of 81% from Shanghai Pudong.
Small steps by the US to increase rent a car san francisco visa processing capacity for Brazil and China are the result of a campaign by the country s travel and tourism advisory board to enrich understanding about the economic repercussions of failing to bolster efforts to increase the annual number of visitors from those countries. If those initial moves to strengthen visa processing capacity are successful, more initiatives could follow to capitalise on the economic benefits in opening travel to more visitors from Brazil and China to the US. Airlines already entrenched in those markets stand to increase traffic from those countries if travel restrictions are further rent a car san francisco loosened.
Even though China's economic growth in the second quarter slowed from 9.6% in 2011 to 7.6% in 2012, Chinese carriers are maintaining an optimistic to bullish growth forecast as they take, like many companies and government initiatives in China, a long-term view of their potential. rent a car san francisco That outlook calls for growth in the short-term to raise brand awareness, especially internationally, and increase travel propensity, which has economic flow-on affects. When economic times are right, and the carriers are sophisticated enough to do so, there will be a sizeable market to profit from.
The implications of that in the short-term are the recent warnings by Air China, China Eastern and China Southern, the country's three biggest carriers, rent a car san francisco of 1H2012 profits declining by over 50%. In a positive outlook, Jun-2012 profits are up following a decrease in fuel prices. Both carriers recently announced plans to collectively take 30 widebody Boeing 777-300ER aircraft and, amongst other Chinese carriers, are pursuing short- and long-haul international expansion. Already in 1H2012 rent a car san francisco Chinese carriers transported 8.7% more passengers than in 1H2011.