Abstract
This paper investigates cooperation between air transport and high-speed rail (HSR), with the air sector reimbursing air-HSR transfer passengers for their HSR tickets while the rail sector sharing revenue with the air sector to compensate for the reimbursement. The air-HSR cooperation facilitates forming a multiple-airports system (MAS). The conditions for reaching such an air-HSR cooperation, with either a competing or monopolized air sector in the MAS, are explored. We find that when the HSR operator is oriented to maximize social welfare, or when the air sectors are monopolized in the MAS, the air-HSR cooperation is more likely to arise. Furthermore, airport congestion has important implications on such air-HSR cooperation. Specifically, air-HSR revenue sharing is conducive to welfare improvement as it is more effective in diverting passengers from the capacity-constrained airport. However, when the air sectors are monopolized, their self-internalization of congestion may discourage HSR from engaging in the revenue sharing. We also find that improving connectivity of airport and HSR station may not always be welfare-enhancing with competing air sectors in the MAS. Finally, the Pareto efficient range of revenue sharing to achieve the air-HSR cooperation is identified.
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