China's aviation industry to suffer billions in losses from high-speed rail

High-speed rail is rapidly becoming a pillar of China's transportation network and an increasing threat to local airlines that have prospered from years of strong demand growth and a lack of efficient ground transport alternatives. China's burgeoning high-speed rail network is already the world's most extensive at 8358 km as at the end of 2010. But that is just the start. A 50% increase in the network is planned in 2011 alone. China's aviation industry is bracing for a reduction in revenues and profitability arising from rising competition from high-speed rail. International expansion is an increasingly necessary option for China's airlines.