Air France Looks to HSR for its Future

I've been meaning to get to this article for a few days now, and though our friends at Trains for America and The Overhead Wire have mentioned it, I hope you won't mind if I bring up the rear, so to speak. Air France is looking into entering the HSR business when the EU deregulates it in 2010:

With the high price of fuel raising the cost of flying, Air France is looking into replacing some of its short-haul European flights with high-speed rail service in partnership with a French train operator, a move that analysts said could lead to significant savings.

HSR would provide Air France with better service by bringing passengers to Charles de Gaulle from around the region for their long-haul flights; and would help their profit margin by lowering costs:

The main advantage for the airlines would be improved profitability, Van den Brul said....

Shifting passengers onto trains from planes would result in "significant" cost savings, a particular concern for airlines struggling to cope with record high oil prices.

Energy accounts for about 40 percent of an airline's total costs, against only around 10-15 percent for rail.

So it makes perfect sense for Air France to look into this model. SNCF has found a cash cow in their TGV system, which has generated so much operating surplus that the French national rail operator can use that to subsidize other services and even give some money to the French treasury. Air France recognizes that HSR is vital to a strong, reliable, and affordable transportation system - that it helps the airlines do their jobs better and more profitably.

Trains for America notes that this model would work well here in the US:

New York-Los Angeles, Miami-Seattle, any overseas travel for obvious reasons… some routes are too far for even fast trains to really compete with air travel. But Minneapolis-Chicago, Boston-Washington, Los Angeles-San Francisco, these are the lengths where high-speed trains are eminently more practical than planes.

And they're absolutely right on that point. Mineta-SJC's woes might be eased by HSR, allowing passengers easier access to it and allowing airlines to focus on the long-haul routes that trains aren't going to be able to displace. HSR can connect cities like LA to SF in roughly the same amount of time as it takes to fly, considering door-to-door time and time at the airport terminal. HSR also has a significant cost advantage as it isn't dependent on the constantly rising price of oil.

American carriers would find this especially valuable. Our dollars bring less purchasing power on the global market and already airlines like United and Delta are cutting service. Southwest hasn't yet been impacted, but that's not because they are magically immune. Instead Southwest, which dominates the intrastate air market in California, benefits from massive use of fuel hedges. They locked in much of their fuel costs at around $51/bbl - but those hedges expire between 2010 and 2013. By that time Southwest will no longer be able to offer cheap fares and will have to cut flights just as everyone else is doing.

HSR would be a boon to these airlines. And that explains why, in contrast to the shenanigans we saw in Texas in the early 1990s, the airlines haven't opposed HSR here. They recognize its value because it helps them make a profit. In turn HSR will help Californians afford to continue traveling within the state as well as connecting to airport hubs to take them around the continent and the globe.