Friday, September 5, 2008

Taiwan's Airlines Reeling From HSR Success

NOTE: We've moved! Visit us at the California High Speed Rail Blog.

In the year and a half that Taiwan High Speed Rail has been in operation it has captured a significant chunk of the island's domestic travel market. It has already achieved profitability and now the island's airlines are reeling:

Since the high-speed railway service began, half of the air routes between Taipei City and the country's western cities have been discontinued, with those from the capital to Taichung and Chiayi closed last year and the one to Tainan ended in August. While flights between Taipei and the southern cities of Kaohsiung, Pingtung and Hengchun--home to Kenting National Park--are still in service, operators recently stated that their future is uncertain, with reductions or cancellations being considered.

Mandarin Airlines, a subsidiary of Taiwan's China Airlines, is the only company still running flights between Taipei and Kaohsiung--once the nation's most lucrative domestic route that was also operated by three other local airlines, Uni Air, TransAsia Airways and Far Eastern Air Transport (FAT). Despite reducing its Taipei-Kaohsiung service to one flight per day Aug. 16, Mandarin Airlines also applied to the Civil Aeronautics Administration under the Ministry of Transportation and Communications to pull out from the route as of Sept. 1.

"Summer is supposed to be the peak season of air travel, but our passenger occupancy rate is barely over 50 percent," said Irving Hsu, spokesman for Mandarin Airlines. "Airlines cannot survive with occupancy rates lower than 60 percent. It is increasingly difficult to maintain operations as more travelers now choose to take THSR's trains," Hsu explained.

Soaring ridership is the global rule and should finally put to bed any lingering argument that California high speed rail will have any problem meeting ridership projections.

The Taiwan Journal article I linked above used the headline "Romance of rail jeopardizes domestic air routes." But I'm not sure it's romance that's at work here. Instead it's likely simple efficiency and common sense. High speed rail is a fast, reliable way to travel. It's easier to do work on a train - you can make calls, perhaps get WiFi, and not be as crowded in as you are on a coach airline seat (with my 6'2" frame it's nearly impossible for me to even open my laptop fully). HSR trains usually serve city centers, whereas airports are typically located on the urban fringe by necessity.

Taiwan's experience, alongside that of Spain, France, and Japan (to name but a few) proves that if given a choice between flying and taking a high speed train, many if not most travelers will choose the train.

What of the economic impact on the airlines? They are already in crisis, and already cutting flights between LA and SF. US carriers are shifting their business model to emphasize medium and long-haul flights, and smaller cities like Fresno are in jeopardy of losing air service entirely. In this context HSR helps fill a vacuum for Californians and helps get the airlines make a shift they're already looking to make. The fact that no airline is spending a dime to fight Prop 1A should suggest how they really feel about it.

Additionally, the carriers that serve intra-California routes are not dependent on those routes. The days of PSA and AirCal are long gone, and even Southwest can survive without the LA-SF corridor.

High speed rail is essential to California's future. The airlines cannot be relied on to provide us fast, cheap transportation with our state. If we act now and pass Prop 1A we can ensure that California has affordable transportation for decades to come - an absolute necessity to a prosperous and competitive 21st century economy.


Anonymous said...

HSR will be much nicer than flying!
I would bet that many airlines will have code-share with our Trains and most people in the Valley will come to SFO via the HST and transfer to long haul flights in one single ticket.anyway
by 2017 it might just cost 600-700
bucks to fly to LA! with fuel costs

Anonymous said...

By 2017 if Prop 1A passes, they will have spent 25 billions or so, laid down maybe 50 miles of tracks, and built the monument to Rod Diridon in Diridon station in San Jose.

It will be like digging a huge hole and no further funding to complete was has escalated to a new estimated cost of 150 billion.

But, BTW, in spite of no station being allowed between Merced and Gilroy they will have purchased the land necessary for a maintainence station in Los Banos and the Dairy farmer, previously on the payroll of the CHSRA will have made millions, selling them his land.

Anonymous said...

Anyone here been able to get a copy of the new business plan for the project? It was ordered produced by Sept. 1 in Prop 1A.

Spokker said...

"It was ordered produced by Sept. 1 in Prop 1A."

October 1st.

Spokker said...

"they will have purchased the land necessary for a maintainence station in Los Banos and the Dairy farmer, previously on the payroll of the CHSRA will have made millions, selling them his land."

It's high time we stand up to these evil dairy farmers and their conspiracy to get rich off the backs of hard working Californian taxpayers!

Anonymous said...

Prop1A IS going to 2017
HSR service is just months away!!!
even you anno will be riding it!!
BTW want are you doing up at 345AM
dropping anti-HST doo doo?

Anonymous said...


Read the Prop 1A law spokker instead of just trolling all the blogs on the blogs on the net.

Sept. 1st was the data the business plan was to be produced. Is the CHSRA going to ignore the legislature?

Robert Cruickshank said...

AB 3034 was signed on August 26. Can YOU provide an updated business plan in six days (three of which were not business days)?

Rafael said...

@ anon @ 3:42 -

if doubling the estimated price tag based on nothing but your gut feeling doesn't scare the bejeezus out of unsuspecting taxpayers, why, just add more truthiness and double it again.

By Nov. 4 you'll be claiming HSR will all the gold in Fort Knox won't be enough to pay for it yet curiously, you still won't get any respect.

I wonder why.

Anonymous said...

Again, I can't stress the convenience and comfort of taking the HSR in Taiwan. With the interconnectivity of the Taipei Metro and HSR in the same central station, it's incredibly easy to navigate your way from any point in Taiwan to another destination. At each HSR station there are coordinated buses that take you to the central cities since the HSR stations are located at quite a distance from city centers. They even take you to tourist sites such as Sun Moon Lake from Taichung HSR Station and connect you to the main international airport from Taoyuan Station. Even my grandparents - who are in their late 70s - much prefer to take HSR than flying, bussing, or conventional rail if they have to travel from southern Taiwan to northern Taiwan.

The train ride itself is amazing. Nowhere in the US can you be travelling at 300 km/hr on the ground. Everything is so smooth - there are no sudden jerks and turns are barely perceptible. It's very spacious inside and there are even dedicated luggage compartments in some trains. And for about 32 USD on a week day (40 USD on weekends) you spend only 1.5 hours flat rain or shine to travel from Taipei to Kaohsiung when it normally takes 4 hours by conventional rail or car. Coming from various slow experiences on Amtrak, THSR is nothing short of amazing. It puzzles me that Taiwan, which has the 16th-largest economy in the world, can accomplish building HSR while California, which as a state is the 5th largest economy in the world, still can't muster up the initiative to revolutionize train travel.

Spokker said...

Hahaha, oh God, this is my new favorite anti-HSR article.

"If you think hurricanes in the gulf are bad, wait until Proposition 1A makes landfall in California."

Haha the hurricane train.

"Oh, no, the train is slowing, and you see a “Track Closed” barrier ahead. As the train grinds to a halt, you notice there is no Gilroy station, just a retired garlic worker wearing a conductor’s hat sitting in the sun at a card table! Off in the distance, you faintly hear, “Sorry folks, we ran out of HSR money.”"

They were bitching that there shouldn't be an HSR station in Gilroy. Now they are bitching that there won't be, and blaming it on a lack of funds. Incredible.

The rest of the article is just hilarious.

Anonymous said...


As you well know, Prop 1A language was agreed to by the CHSRA quite a while ago and they agreed to provide the business plan Sept 1.

They have yet to produce it. Don't give me the crap that they can't produce a business in 3 days; they have really had years to produce one and as Senator Ashburn said, "you don't have one".

Now the production of the business plan was codified in Prop 1A. Are they risking having this bond measure ruled invalid because they are defying the will of the legislature and keeping the voting public from having a true picture of the economics of the project?

Brandon in California said...

^^^ That is funny! Someone doesn't have a sense of time.

無名 - wu ming said...

i'm really looking forward to riding that taiwan HSR. their trains were already far and away better than anything we got in the states, but HSR is a whole nother experience, and really helps to tie the island together more tightly.

as prop 1a would do for CA.

Haitien said...

Great site you've got here, a few words on Taiwan High Speed Rail from personal experience:

- Service is phenomenal, it's roughly 208 miles long, which can be covered in roughly 90 minutes. The entire system is clean, efficient, and convenient, and has really pulled the two ends of the island closer together - it's no big deal now to hop an HSR train from the south end in Kaohsiung after dinner and still make it to the north end in Taipei in time for bar hopping or late night snacks at the night markets the same night. Imagine being able to do something similar between San Francisco and Bakersfield!

- Most of the new HSR stations are located on the outskirts of the cities they serve, since acquiring rights of way through urban cores was deemed to be too problematic. However as another poster noted, connectivity of the HSR stations to core areas via local rail, rapid transit, and busses is excellent.

- The system was a political hot potato when it was under construction. Several politicians used the entire thing for grandstanding claiming that the project should be canned for everything thing from cost overruns to claims that the trains would derail during earthquakes (Taiwan is on the Pacific Ring of Fire). One prominent politician even made a big deal about refusing to take THSR on opening day, and flew instead (complete with a large complement of reporters). The system has been running for over a year now, and the former naysayers have since changed their tune. The aforementioned politician is now Taiwan's president, and made a big deal out of shipping himself and guests to his inauguration via HSR.

- In an interesting contrast to attitudes in the US towards mass transit, land values near the HSR stations have skyrocketed. Titles to land adjacent to the HSR stations (mostly out in the boonies as mentioned previously) were snapped up the instant word got out. This was similar to the situation about a decade prior, for empty or low value land located next to newly completed Taipei Rapid Transit (MRT) stations - those areas are now full of posh housing, and neighborhoods served by the MRT have seen business boom since then with the increased passenger traffic.

I think in the US we tend to operate on the notion that public transit has to be slow, inefficient transportation welfare for people who can't afford their own cars. No surprise then that that's what we usually end up with. Living in Taiwan for several years really opened my eyes to how good mass transit can be, and how liberating it is to not have to worry about car insurance payments, or whether there will be a parking spot once you get there.

Anonymous said...

California should learn from Connecticut. As weird as it sounds, it should.

Stamford, Connecticut is today a booming city, because it is only 30 minutes away from New York (on a slow commuter train nonetheless!). By California standards, it's small, only 50 square miles, but is dense (120,000 people) and is very rich.

Southwestern Connecticut has changed from a wealthy bedroom community for New York to the very wealthy host of foreign banks, stock services, and hedge funds because of its proximity to Manhattan.

Remember, if a city is 3 hours drive away from San Francisco, no mid-level foreign or domestic corporation will set up shop because of traffic. But if it's only one hour away on a rail line, then companies are much more likely to buy office space and hire local workers.

Connecticut spends millions for its commuter rail service to New York, but has recieved billions back in new growth. High Speed Rail in California will have the same effect, especially in cities close to LA or SF (i.e. Bakersfield and Fresno probably have the most to gain from the rail, being 1 to 1.5 hours away from LA and SF respectively).

Unknown said...

Taiwan High Speed Rail Insolvent:
November 10, 2009

The Taiwan government was forced to take control today of the bankrupt Taiwan High-Speed Rail Corp. (THSRC). In the two and a half years since the end of June 2009, the debt-ridden Taiwan High-Speed Rail Corp. has accumulated losses of over NT$70 billion (US$2.16 billion) -- about 66 percent of its paid-in capital of NT$105.3 billion -- and total debts of NT$400 billion. On Tuesday, THSRC Chairman Ou Chin-der said the company can stop losing money only when its average transport volume reaches 145,000 people a day while the current daily transport volume is only some 90,000 people daily.