Jun 17, 2011 05:47 PM

Analyst: Beijing-Shanghai Rail Won't Compete With Airlines

(Beijing) -- High-speed railways linking Beijing and Shanghai are unlikely to deal too much of a blow to air services on the same route, Essence Securities said in a report on June 16.

Airlines remain the favored choice for business people as it takes no more than five hours to travel between Beijing and Shanghai, Essence noted, adding about 10 percent of air passengers are expected to make the switch to the high-speed trains.

Of the 90 total two-way journeys of high-speed trains each day traveling between the two cities, there are only eight non-stop shifts that run at a speed of 300 kilometers per hour and arrive within five hours, according to Essence.

As for ticket prices, a first-class seat has been priced at 935 yuan and second-class at 555 yuan on high-speed trains, almost half the price of an economy class seat on an airplane, thus making the train service more attractive to tourists, said Essence.

Air ticket prices will go down to cope with the competition from high-speed trains. But the decrease will not exceed 20 percent as the majority of passengers between the two cities travel for business purposes, said Essence.

The Beijing-Shanghai high-speed railway is set to open this month.

1 yuan = 15 U.S. cents

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