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Why China’s New Bullet Trains Won’t Eat Up Airline Profits

 In fact, China plans to add more than 3,100 miles of high-speed rail track by 2015, bringing the total length of the system to about 9,000 miles. Meanwhile, China’s airlines are also growing rapidly, with nearly 100 new airports planned by 2020.

The turbocharged expansion of ultra-fast train networks has led some investors to question whether bullet trains could poach passengers and profits from airlines, Credit Suisse transportation analysts Davin Wu and Timothy Ross explained in a report called “Can Airlines Beat High-Speed Rail?” “The major concern of the market is that the airlines will cut airfare to protect their market shares, and that load factors (a measure of how full flights are) could be substantially lower than the levels before the launch of high-speed rail,” they wrote.

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