China’s Ministry of Railways Vice Minister Hu Yadong announced the ministry has released its pricing structure for the soon to be launched high-speed rail link between Beijing and Shanghai, with prices ranging from CNY410 (USD63.1) to CNY1750 (USD269.2) (Beijing Evening News/Xinmin/Bloomberg/Xinhua, 13-Jun-2011). One-way fares on the 250km/h trains will start from CNY410 for second-class seats to CNY650 for first class while fares on the 300km/h trains will start from CNY555 for second-class seats to CNY1750 for business class. Mr Hu stated the Beijing-Shanghai rail link is expected to transport 180,000 passengers per day initially and has capacity to carry 80 million passengers p/a. Chinese carriers have responded stating they have no plans to cut capacity on the lucrative sector as yet. China Eastern Airlines and its Shanghai Airlines subsidiary, which has the largest market share on the sector with 55 return flights per day, the rail link could lead to a 20% to 30% reduction in airline passengers within the first six months but will not have much of an effect in the long-term due to “diversified demand”.
Meanwhile, Mr Hu also stated the ministry has announced plans to reduce ticket prices on high-speed rail links between Wuhan and Guangzhou, Zhengzhou and Xi’an and Shanghai and Nanjing by 5% as the speed on the rail links are reduced from 350 km/h to 300 km/h due to cost and safety concerns, effective 01-Jul-2011 (China Broadcasting, 12-Jun-2011).