Against the Air Bridge
The Puente Aéreo between Madrid-Barajas and Barcelona-El Prat is (was?) the busiest air link in the EU by passengers (and the world's busiest by flights). Thus, the parallel high-speed line was projected from the onset with the airlines' fierce competition in mind. State railways RENFE calculated that it can be competitive only with travel times under 2½ hours over the 621.0 km line.
The line was opened in three stages, the last section with a 3-year delay, while the lasting inoperability (due to instability) of the new wireless-technology signalling system (ERTMS Level 2) limits top speed to 300 km/h (the track authority refused to set a date for 350 km/h even on the anniversary). Still, due to the greater acceleration of the new trains, the current fastest schedules of 2h38m approach RENFE's goal. The result? Impressive growth:
Most data shown is from a Vía_Libre article, but some of it includes my corrections/extrapolations/estimates. Train types:
- AVE: 'true' long-distance high-speed trains (maximum speed presently 300 km/h)
- Alvia: gauge-changing long-distance high-speed trains (max speed 250 km/h)
- Altaria: locomotive-pulled gauge-changing long-distance trains (max speed 220 km/h)
- Avant: medium-distance high-speed trains (max speed 250 km/h)
- MD conventional: medium-distance trains on parallel conventional lines, shown here as traffic affected by the launch of parallel AVE/Avant services
Meanwhile, from 2007 to 2008, ridership on the Puente Aéreo dropped from 4.6 to 3.6 million passengers (-24.2%) – a clear-cut case of modal shift if there is one. In fact, looking at monthly data, trains (334 runs/week) already caught up with planes (c. 645 flights/week) in market share:
Above: monthly passenger numbers in thousands (Avión = air, Tren = trains), also reflecting seasonal changes
Below: monthly air/rail market shares
Diagram above and most of the data below taken from Ferropedia
So, it would appear that RENFE predicted the travel time threshold below which it has the edge over planes rather well. However, note that RENFE missed its own expectation for the entire line by almost 250,000 – and that for the Madrid–Barcelona relation alone by 300,000. Only the last few months of Spanish intercity traffic were affected by the economic crisis, so there is something else at play here. I criticised high ticket prices a year ago, and I find that this has indeed become a theme in the Spanish media over the past year. Even at the anniversary press conference, where new airline-style last-minute discounts were announced.
Back to the growth numbers, from a transport planning point of view, the most interesting numbers aren't those for Barcelona – but those for well-established relations. In its fifth year, for example Madrid–Zaragoza grew more than 20%! The reasons should be obvious, yet they often aint' for most decision-makers:
- Hysteresis: all potential customers won't try out a new offer instantly – you have to wait for people to discover that the new alternative is better.
- Synergy in train frequency: if services are extended, train frequency may be increased to take up the extra passengers to/from the new destinations. But a higher train frequency also means that on existing relations, more people will find trains at convenient times.
- Synergy in destinations: the ability to reach most of your usual travel destinations with the same transport mode can be a convenience, too. Thus, for some passengers, the choice of transport mode on one relation is not independent from that on others.
The first is worth a few more words.
Growth curves
For an illustration, I have selected three European high-speed services, which served more or less the same destinations over the years.
Background photo by Luis Miguel R.S. from Flickr.com. Notes:
- Eurostar was sped up by the opening of the two stages of High Speed 1 in Britain in autumn 2003 resp. autumn 2007. Thus 1995–2002, 2003–2006 and 2007–2008 can be viewed as three separate growth curves. (The 2000–2003 dive corresponds to post-DotCom-Bubble recession and the rise of budget airlines.)
- The 2007 dip for Thalys corresponds to the handover of services with airport stops to SNCF.
- I terminated data for Madrid–Sevilla in 2002 because RENFE's statistics don't disaggregate high-speed traffic on different lines until 2005, and use an incomparable definition afterwards. However, the curve was roughly similar to Eurostar's, with a drop in 2003 caused by similar factors plus the withdrawal of some trains for the second Spanish high-speed line, and later growth further boosted by the Córdoba–Málaga branch.
What should be striking is that traffic seems to reach its full potential in at least five years. (Air/rail market share data would have been more appropriate for this purpose, but it's harder to come by, and you get the picture.)
The Madrid–Sevilla line is noteworthy in particular: steep growth for a decade. This line was the first in Spain for political and prestige reasons: it was built from the capital towards two lesser cities in Socialist-voting poorer regions for the Expo '92 in Sevilla. Consequently, there were serious doubts about it ever turning a profit. Yet, that was achieved from 1997.
The lesson from this: high-speed rail (and not just high-speed) is a long-term investment. Do not insist on instant success – but do expect a permanent change in travel patterns.
Asian High-speed Tigers
As for examples of bad starts, consider the Korea Train eXpress (KTX) and the Taiwan High Speed Rail (THSR).
Both of these lines were built along corridors with traffic demand well beyond anything we have in Europe. But, due to high population density (translating into high build-up), geological obstacles, and cost overruns, both were rather expensive, too.
For the KTX, cost overruns were mostly due to the culture of favouritism between the state and large business conglomerates, which one may better term institutionalised corruption. The latest example, just a month ago: after the discovery of cracks, it became apparent that a company contracted to supply sleepers had no expertise at all in the field, and now all those sleepers will have to be replaced.
For the THSR, cost overruns were largely the consequence of a switch to Japanese suppliers after planning based on European high-speed technology was already well-advanced. The decision was widely rumoured to have been political (and led to an epic political, media and court battle ending in damage payments to Eurotrain), and the overseeing company THSRC did not go with the actual Japanese offer, but stuck to its guns on specifications. Thus f.e. a German maker had to be contracted to supply fixed-track high-speed switches (no need for those on Shinkansen lines with their strictly single-direction tracks).
Likewise, both lines were opened half-finished: one-third of the Seoul–Busan KTX line was delayed (until 2011, now thanks to those sleepers maybe even further), THSRC started with a reduced schedule, both started with some stations unfinished (for the THSR, including both downtown terminuses!) or without urban transit connections. Also, both lines started with hefty ticket prices that had to be reduced later.
As a result, on both lines, even last year, ridership barely passed half of the original expectations for the first year.
Note: KTX's first year started on 1 April, THSRC's on 5 January; initial ridership predictions were given as average daily figures, here multiplied by 365
The failure to meet expectations after the start was widely discussed as a national scandal in both countries. However, you can also see on the graphs that there was steady growth thereafter. And that at the expense of other modes of transport.
The modal shift was particularly spectacular in Taiwan. In just 20 months, all but one single daily flight between the cities served by THSRC was eliminated (last December, THSRC's share of the air/rail market was 99.95%...), leaving the highway as only competition. Total domestic air passenger transport fell almost by half(!). The steady uninterrupted annual growth of highway traffic was not only stopped but turned back. In South Korea, too, even the unfinished line was enough for rail to grab almost two-thirds of the total air/rail/road market between Seoul and Busan (up from 38% to 61% by 2005 already), halving air traffic.
As a consequence of these growths, KTX turned a profit in 2007, while THSRC achieved a positive cash flow from April 2008.
Then again, THSRC is negotiating for a refinance. For, it is a victim of the financial crisis similar to some US mortgage takers: it took a lot of credit with above-market variable interest rates. Currently, about two-fifths of its monthly income go for operating costs, and the rest for paying interests.
THSRC's finances are a horror story worth to mention in some detail. THSR was chosen to be a build-operate-transfer (BOT) franchise, THSRC is essentially a private financial corporation taking credit and contracting out work. They won the franchise with the promise to require zero public money. However, following the 1998 Asian Crisis, it had trouble collecting the needed sum. So it took what it could, including the variable-rate credits, hidden state support in the form of credit and capital from state companies, and the income from selling a 10% share to the Japanese construction companies. The refinancing sought after would involve foreign banks, while the domestic creditors whose approval is needed would prefer a capital increase.
How (not) to get bad publicity
It happens actually quite often that a major new rail project gets off to a really bad start, generating bad publicity – and then turns into a solid mainstay of the transport system a few years later (with less media coverage). To sum up the reasons:
- an expectation that people will change travel patterns instantly;
- financing (e.g. interest rates and period of maturity) and rosy projections themselves are tailored for short-term expectations on profitability;
- after diverse construction delays, (especially high-speed) lines are often opened half-finished (missing sections, stations, local transit connections, trains, signalling), and thus can't realise their full potential instantly;
- when the builders become nervous about their ridership projections (be it due to cost overruns or 'half-finished' openings as per above), they tend to bet on passengers accepting higher ticket prices – which usually doesn't work out.
No single one of these need to prove fatal, though. It's instructive to consider the early history of a high-speed service that was an instant success, the TGV on the first, the Paris–Lyon line.
The LGV Sud-Est wasn't built without delays, with reasons including political ones: the scepticism of political leaders (including Giscard d'Estaing and Jacques Chirac), the protection sought for airports (with heavy lobbying by the Chamber of Commerce and Industry) and domestic airlines, and a brutal labour dispute with construction workers led to a delay of the one-third nearer to Paris by two years.
Of course, the above also meant cost overruns. The final cost (8.5 billion francs for the line only, 13.8 billion with trains at 1984 prices = €3.6 billion in 2008 prices) was about 80% above earlier predictions – though still well below predictions by sceptics (up to FF10 billion(1976) = €5.8 billion). Meanwhile, SNCF collected all the funding from private creditors.
However, SNCF did everything right on ticket prices at the start.
...marketing surveys showed that the public, while having been thoroughly exposed to the TGV through years of media publicity, was surprisingly misinformed about the details of its operation. Many French people believed that the TGV was an elite train for business travelers, with first-class seating only...
To counteract such misapprehensions, the SNCF needed a carefully worded series of print ads...
Jacob Meunier: On The Fast Track: French Railway Modernization and the Origins of the TGV, 1944–1983, page 209 @ Google Books
...The third key message was designed to publicize the SNCF's fare structure, namely that the price of a TGV ticket, first or second class, would be no higher than the price of a ticket on a regular train. "TGV. 260 km/h au prix de 160 km/h. Ça vous intéresse?" ("TGV. 260 km/h for the price of 160 km/h. Are you interested?"). This was a radical departure from the practice in the 1960s, when fast trains always required a surcharge be paid. The fourth key message emphasized accessibility to all: "En seconde comme en première, le TGV c'est du temps gagné pour tout le monde" ("In both second and first class, the TGV means time savings for everyone").
On The Fast Track... page 210
...This commitment to "democratizing" high speed rail was reinforced by the Socialist government of the early 1980s. Indeed, under the Mitterrand presidency, the SNCF introduced a remarkable publicity slogan to promote the TGV: "Progress means nothing unless it is shared by all" (Le progrès ne vaut que s'il est partagé par tous").
On The Fast Track... page 7
In the next decade though, SNCF abandoned this ticket price policy (currently, AFAIK only Austrian State Railways ÖBB follows a similar policy). But before that, there was the success:
A very tentative attempt at representing vague data. (Background photo from Unixia @ Picasa.) Notes:
- First year traffic from the opening on 22 September.
- Second stage opened on 25 September 1983.
- Traffic growth also reflects the expansion of TGV services beyond the high-speed line (no fair comparison unlike the Eurostar-Thalys-MadridSevilla graph).
- The 1967 and 1974 predictions seem to focus on initial ridership.
- The 1969 prediction (in an internal document) and the 1980 one (for the year 1985) are for fully-developed service. For the latter, figures in the source are for all long-distance trains along the Sud-Est corridor, I subtracted actual non-TGV traffic from that.
- CLASAD: country guardians, the loudest opposition to the TGV. Their takedown in a 1976 pamphlet also incorporates airlines' sceptical estimate on market loss. Figures in the source are relative to an unspecified SNCF estimate, I assumed 1974 high.
- Les Amis de la Terre: environmentalists. They did not oppose the TGV, but advocated a scaled-down version coupled with improvements to the existing line. Figures in the source are again relative to an unspecified SNCF estimate, I assumed 1974 low.
Other new lines in Europe
Of the lines I covered in European HSR expansion in 2007, let's take the latest addition to the TGV network first: the LGV Est Européenne.
Numbers from SNCF. TGV Est Européen's first year lasted from 10 June 2007 to 9 June 2008, the prior conventional line services are for 2006/H2+2007/H1
The goal was 11.5 million passengers in 2010 – that was surpassed already in 2008 (calendar year; 11.9 million). On the Paris–Strasbourg air/rail market, the TGV won the targeted 70% share (vs. 30% before) already in the fourth month of service. However, the province-to-province traffic underperformed, the blame was on ticket prices [CORRECTION UPDATE->] partly because of the delayed introduction of such services, and partly because of some even more underperforming wayside stations (For example Lorraine TGV between Metz and Nancy: reaching half of the forecast 900,000 even in its second year), which are situated far from city centres.
Next, let's return to Spain: the finished Córdoba–Málaga line passed its first anniversary, too.
Notes:
- Services to Granada, Algeciras leave the line just at the end of the first section, opened 16 December 2006.
- The second leg of the line was opened on 24 December 2007, also the start of AVE services.
- Málaga–Córdoba–Sevilla Avant service started on 20 February 2008.
- Figures for the proper period are my interpolations. RENFE publishes aggregated data for services from Madrid, the shares of those actually travelling the new Córdoba–Málaga line are my educated guesses.
AVE traffic well exceeded expectations, already reaching the goal for 2009. Madrid–Málaga air traffic (already depressed by Altaria service) fell 27% in 2008; in the last few months, AVE commanded more than 60% of the air/rail market.
Another new line in Spain is Madrid–Segovia–Valladolid, which includes the 28,418.66 m long Guadarrama Tunnel.
The line was opened on 23 December 2007. Madrid–Segovia Avant service started on 20 February 2008 (extended to Valladolid only this January). Figures for the proper period are my interpolations
High growth, but still rather light traffic for an expensive line, it would appear. However, just look at the relative AVE-Alvia figures: this line was meant less as a corridor for the relatively small population along it, and more as a trunk line to the entire North and Northwest of Spain. Thus, it is encouraging that already a partial acceleration of gauge-changing train services to destinations beyond Valladolid brought traffic growths between 26.4% and 170%.
No less than six high-speed main lines are to branch out from this trunk line. Work on one direct extension of the existing line (to Zamora, Galicia branch) started last year, and tendering for two others (to Leon and Burgos) is now on-going, while three further-away sections (Ourense–Santiago on the Galicia branch, Pajares Base Tunnel on the Asturias branch, and the Basque Y) are in advanced construction.
Elsewhere in Spain, the Barcelona to France section, a whole network of lines to the south-east of Madrid (AVE Levante), more connections in Andalucia, and a first section of the line to Lisbon in Portugal are in construction. With those, I expect a strong modal shift for the whole of Spain by 2013, if last year's developments are any indication.
For, using INE numbers, the big picture in 2008 was that Spain's domestic air traffic fell by almost 3.2 million passengers (-7.2%, to 41.2 million) – the first major drop after two decades of rapid growth in good times and mere stagnation in recessions – while the ridership of long-distance rail (of which now just about half is AVE) rose by more than 4.5 million (+24.3%, to 23.1 million).
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Two S-103 have whizzed by on the bridge on their descent from the watershed towards Barcelona, while a freight train climbs the old line in the valley below. Photo near La Riba/Catalonia by Javier López Ortega from Flickr
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