The Impact Of The High-speed Railway On The Behavior Of Low Cost Carriers

In recent years,the rapid development of High-speed railway(HSR)has had a considerable impact on the air transport industry,especially Low cost carriers(LCCs).On the lines where HSR has been put into operation,the flights of LCCs have been greatly reduced,and some airlines even choose to suspend flights on some lines.Faced with the large-scale opening and expansion of HSR,HSR will have an impact on the behavior of LCCs.Based on the theory of transportation economics and guided by the empirical research at home and abroad,taking LCCs as the research object,this paper adopts econometrics method to study the impact of HSR on the behavior of LCCs from the three perspectives of LCCs’ entry into the market,seat supply and dynamic price,so as to provide certain reference for the development of LCCs in China.Firstly,based on the macro status quo of China’s HSR and LCCs,this paper analyzes the mechanism of the impact of China’s HSR on LCCs by referring to the existing experience at home and abroad.On the basis of this theory,the Probit model in econometrics is used to empirically analyze the impact of the opening of HSR on the entry of LCCs into the market.Secondly,non-equilibrium panel regression is used to analyze the impact of HSR on LCCs’ seat supply.Finally,considering the fluctuation of flight ticket price,this paper takes dynamic price as the innovation point and uses nonequilibrium panel regression to analyze the impact of HSR on dynamic price of LCCs.The findings:(1)The opening of HSR has an inhibitory effect on the entry of LCCs’ network into the market,seat supply and ticket price.On the contrary,the opening of HSR has promoted the entry of KN into the market and increased the ticket prices of 9C and KN.9C and KN main service in Shanghai and Beijing airport as the starting point of route,the route is usually have larger transport demand,demand for passenger of HSR efficiency should be higher than the lure of the substitution effect of LCC’ passengers,the ascension of the passenger travel demand in the region,resulting in LCCs’ ticket prices increase;PN and 8L mainly serve the central and western routes with low transport demand,while AQ has a short development time and mainly serves the connection between Guangzhou and western cities.The passenger flow in this region is relatively small,so the substitution effect of HSR on LCCs is higher than the inducing effect among these airlines.(2)The increase in the frequency of HSR operation has a restraining effect on the market entry of LCC’s network,seat supply and ticket price.In transport market,the frequency of HSR is higher,it shows that the more passengers HSR carries,the more passenger flow it attracts,which seriously reduces the passenger flow of aviation and hinders the development of LCCs in the transportation market.As a result,the number of seats provided by airlines is greatly reduced,which leads to the LCCs to attract passengers by lowering the ticket price.On the contrary,the frequency of HSR operation has promoted the fare increase of 9C and KN,which has the same impact as the opening of HSR.(3)The increase in the average time of HSR has promoted the entry of LCCs into the market and the supply of seats,especially 9C.However,the average time of HSR has a restraining effect on the ticket price of LCCs’ network,but a promoting effect on the ticket price of PN and KN.After HSR entered the transportation market,it undoubtedly brought heavy losses to the aviation market.Some carriers took policies such as canceling routes and lowering fares to deal with the challenges brought by HSR.HSR is a strong alternative,so carriers have to take the form of lower fares to meet the challenge.The routes of PN based at Chongqing Jiangbei Airport and KN based at Beijing Daxing Airport are mostly long-distance routes.The increase in the running time of HSR makes people tend to choose aviation as the mode of travel,and the increase in passenger flow increases the ticket price of carriers.