Quantifying the substitutability and complementarity between high-speed rail and air transport

Abstract

This paper quantifies the substitution and complementary effects of high-speed rail (HSR) on air travel demand in terms of both route traffic and airport enplanement. Employing the difference-in-differences (DID) method, the first part of the analysis measures the effect of new HSR routes on parallel air route traffic with a focus on East Asian regions (Mainland China, Japan, South Korea, and Taiwan). The second part examines the effect of air-HSR integration on passenger enplanement at East Asian airports and compares with that in the Central European market. We find that in general the airport’s access cost (reflected by the distance from central city) has a negative impact on the air traffic. The substitution effects of HSR are the most significant on short- and medium-haul (below 1000 km) air routes while introducing HSR services has encouraged long distance (over 1000 km) air travels in Mainland China. The complementary effect is investigated in the context of air-HSR integration, which has significantly positive impacts on airport enplanement at primary hub airports when fitted with on-site HSR links. The benefit is limited at secondary hubs and regional airports possibly by locations and HSR service frequencies.