China’s high-speed rail is so popular, it’s hurting the domestic airline industry

China Southern Airlines is the latest Chinese airline to post miserable year-end 2013 results. Net profit dropped 24% to 1.99 billion yuan ($321 million), and operating profit fell 70%. China Southern Airlines joins Air China, where net profit dropped 32% in 2013, and China Eastern Airlines, where it fell by 25%.
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High oil prices, as well as increased competition from low-cost carriers and each other, have taken a toll. But, as each airline has recently acknowledged, so has China’s massive and growing high-speed rail system.
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As Quartz reported last August, the costly and sometimes under-used rail network was shaping up to be a vital part of China’s growth strategy. It doesn’t have the hurdles of the airline industry: Airlines in China struggle to get clearances from the military to expand flight paths, and China’s major airports have earned the title of the most-delayed in the world, where passengers sometimes riot to protest long waits and miserable customer service.
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The high-speed rail system, on the other hand, has quickly grown to over 6,000 miles (9,700 km) in five years, and will expand to 19,000 kilometers (11,800 miles) by 2015. It is already transporting some 2 million passengers a day on trains that are rarely delayed, and which go nearly 200 miles an hour, twice as many passengers as domestic airlines.

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http://qz.com/193556/chinas-high-speed-rail-is-so-popular-its-hurting-the-domestic-airline-industry/