Impact of High-Speed Lines in Relation to Very High Frequency Air Services

The Madrid–Barcelona air route constitutes one of the main aerial routes in the European corridor in terms of traffic demand (4.2 million passengers in 2003). To deal with such a high demand, three airline companies (Iberia, Air Europa, and Span Air) globally offer more than 60 flights per day either way. Currently, the construction of a high-speed railway line between the two cities is under way. The line is expected to come into commercial service by 2007, covering the whole of the 625 km between the cities. This article analyzes the impact that high-speed railway services have on air traffic demand. The results are then compared with real data corresponding to the Paris–London line, on the occasion of the launch of the commercial service of the high-speed Eurostar train. Journal of Public Transportation, Vol. 8, No. 2, 2005 18 Introduction In the past decade (1990–2000) the demand for air transport in Spain has increased significantly. A thorough examination of the changes in air traffic in the Madrid–Barcelona route, one with the greatest demand within the Iberian peninsula, is a sufficient indicator of this growth. In fact, in 1990 the flow of air passengers between the two cities was 2 million persons, while last year, this figure reached 4.2 million passengers—an average annual growth of 6.4 percent. Internationally, the above-mentioned figures place Spain in the vanguard of European air sectors with the greatest air traffic demand (Table 1). Table 1. Main Passenger Air Traffic Routes Within the Main European Countries (2001) Passenger Air Traffic Country Route (in millions) Germany Frankfurt–Berlin 1.6 Frankfurt–Munich 1.5 Spain Madrid–Barcelona 4.0 Barcelona–Palma de Mallorca 1.6 France Paris–Nice 3.0 Paris–Toulouse 2.9 Great Britain London–Glasgow 2.7 London–Edinburgh 2.6 Italy Rome –Milan 3.4 Source: Original chart using data from the Institute of Air Transport (ITA). The Madrid–Barcelona sector was opened to air transport liberalization in 1993. Since then, two new companies, Air Europa and Span Air, have offered services along with Iberia, the only operating airline in this route before 1993. The increase in the number of services has given rise to two important factors: (1) a significant increase in mobility in this corridor and (2) an overwhelming alteration in the modal distribution of air traffic among the three companies. On the other hand, a new railway high-speed line is presently under construction, which, by 2005, will connect Madrid and Barcelona in two and a half hours. Impact of High-Speed Lines 19 This article explores the effect of air transport liberalization and the foreseen consequences not only by air companies that operate in this corridor, but also by the new railway operator (RENFE), in the modification of the present distribution between modes of transportation demand. The Madrid–Barcelona Air Corridor (1974–1993) The main commercial routes that have existed for more than 25 years between the two cities can be summarized by the following data: at the beginning of the 1970s, air traffic through this corridor was approximately 900,000 passengers per year. This traffic included 78 percent businesspeople who wanted to take a round-trip on the same day. To meet this demand, in November 1974 Iberia introduced its shuttle service, the first such service operating in Europe. This service encompassed the Anglo-Saxon concept of “first come, first served.” The first air shuttle of this kind operated between Rio de Janeiro and Sao Paulo (1959), followed by a similar service established shortly thereafter between New York and Washington, D.C. (1961). For almost 20 years, Iberia was the only airline operating the Madrid–Barcelona connection. In terms of supply, 13 flights per day in either direction were offered in 1974, while 30 flights per day were offered in 1993. Figure 1 shows that passenger traffic grew from 974,000 the first year the air shuttle service operated (1974) to 1,926,000 passengers in 1993. It is easy to see the influence of the economy on the development of air traffic over time. In the first half of the 1980s, air service was affected by a serious economic crisis in Spain. While the year 1991 was especially difficult because of the Gulf War, air service partially recovered due to the Olympics, which were held in Barcelona the following year (1992). In short, air traffic on the Madrid–Barcelona route doubled during the period 1974–1993. Journal of Public Transportation, Vol. 8, No. 2, 2005 20 Figure 1. Evolution of Air Traffic on the Madrid–Barcelona Route (1974–1993) Arrival of New Companies in the Madrid–Barcelona Air Shuttle The opening of the airline market in Europe began to take effect at the end of the 1980s, and it came into being for the domestic market as of January 1993. For the Madrid–Barcelona corridor, this was characterized by the introduction of a new range of flights provided by two airlines that, until that time, had not operated in this sector: the first, Air Europa, began services on January 31, 1994, and the second, Span Air, on March 14, 1994. Table 2 shows the flights initially offered by each airline. An analysis of Table 2 shows the following significant features: • Frequency of service offered by Iberia was notably higher than that offered by the other two companies. Specifically, out of a weekly total (the number of flights on Saturdays and Sundays decreases for any company) of 603 flights, Iberia offered 430 flights (71%); Air Europa, 102 flights (14%); and Span Air, 71 flights (12%). • Unlike Iberia, Air Europa and Span Air obligated passengers to reserve a seat on a given flight (despite the fact that the flight initially chosen could be changed under certain conditions). Impact of High-Speed Lines 21 • Prior to the arrival of the two new companies, Iberia had a single fare of 90 euros for tourist class. Upon their addition, Air Europa and Span Air offered fares that were 33 percent lower than the existing ones, with normal fares of around 60 euros. Table 2. Services Provided in the Madrid–Barcelona Air Shuttle (1994) Frequency of Type of Price Level (€) Fare Airline Service Fare (one way) Conditions Iberia every 15 min. Business 114 No reservation on the hour needed every 30 Flexible 90 No reservation to 60 min. economy rate needed during nonpeak Low-hour 72 9am to 4pm hours economy rate 8pm to 10pm regularly Reduced 58 Reservation scheduled price needed flights Air Every 2 hrs Regular 60 Reservation Europa economy fare required Reduced 54 Bought in a economy fare booklet of 20 flights Span Every 2-3 hrs Business 77 Reservation Air required Regular 60 Reservation economy fare Required Economy fare 51 Buying the (round trip) round-trip ticket at the same time