# Would airlines like to operate HSR services?



## CHamilton

Virgin America Leaves SJC [Airport] – But Wants to Operate HSR





> In what is seen as something of a blow to Mineta San José airport, Virgin America announced last week it would be leaving SJC even though they had just launched flights to LAX less than a year ago...
> 
> Officials had hoped success with the single SJC-to-LAX route would prompt Virgin America to add the real prize: Longer flights to East Coast and Midwest cities like Chicago, Boston, New York and Washington, D.C. — a major goal for city and business leaders.
> 
> This should not come as any surprise. We’ve known for years now that airlines see the most profits in medium and long haul routes, not in the short haul shuttle routes like SF to LA. In 2010 JetBlue’s CEO made the point explicitly...
> 
> Airlines make some profit on their SF-LA routes. But as fuel costs rise, those profits have shrunk. Given the immense cost of expanding airports, gate space is at a premium. Airlines would much rather use those gates for the more profitable medium and long haul flights than for more shuttle flights within California.
> 
> So what about the short haul routes? Do companies like Virgin and Southwest plan to just abandon those? Far from it. In fact, they would like to operate high speed rail on those routes, replacing air travel, according to Ben Tripousis of the California High Speed Rail Authority...
> 
> So the shape of transportation in California’s future is clear. The airlines would like to redirect existing gates to medium and long haul flights and replace the short haul flights with high speed rail. ...
> 
> More importantly, it shows that to the private sector, HSR is a big deal and very important to their future plans. Of course, it’s also beyond their ability to fund the capital costs, which is where government comes in.


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## cirdan

I don't know if they still are, but there was a time that British Airways was a minority shareholder of Eurostar.

Virgin ran, and still runs a UK train franchise.

During the 1980s, Lufthansa ran a number of train services in Germany, serving the major airports. These trains have since been abandoned however, in favor of codeshares on normal trains.

Bus people also run trains. Virtually all the UK franchises are run by bus companies (Stagecoach, Arriva, National Express, First Group etc).

The Spanish bus group ALSA, which is considered one of Europe's leading bus companies, has applied for a license to run high speed trains in Spain.

Meanwhile German railways have actually bought Arriva and so become one of Europe's leading bus companies and are using the synergies to enhance their own market position.

So I would conclude that whereas both airlines and buslines are interested in running trains, the bus people have so far been more succesful at actually doing it. Maybe because the markets and mechanisms are more similar? So maybe rather than trying to run their own trains, airlines might be better advised to build alliances to train companies.


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## jis

cirdan said:


> Virgin ran, and still runs a UK train franchise.


An observation about the relationship between _Virgin Trains_ and _Virgin Airlines_

_Virgin Trains_ has very little to do with _Virgin Airlines_ or _Virgin Atlantic Airways Limited_ in any direct way.

_Virgin Trains_ is a subsidiary the _Virgin Rail Group_. This subsidiary is 51% owned by _Virgin Rail Group_ and 49% by _Stagecoach_, a bus and train operating company.

_Virgin Group_ also owns 51% of _Virgin Airlines_, the rest being owned by _Delta Airlines_. It also wholly or partially owns two or three other airlines, directly or indirectly.

_Virgin Group_ also owns among other things - a couple of hotel chains, a soft drink company, several mobile telephone companies, a financial services company etc. etc. So it is truly a conglomerate of which the airline business partial ownership is but one aspect.

So to claim that _Virgin Trains_ is an example of an airline operating trains is a bit far fetched.


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## Green Maned Lion

Generally speaking I'd say most airlines wouldn't consider the idea of operating high speed rail. Most older legacy companies are incapable of embracing change meaningfully. They are incapable of adapting to changing business environments. That's why they tend to form, boom, stagnate, and die.

Woolworth couldn't adapt to Sears. Sears couldn't adapt to Kmart. Kmart couldn't adapt to walmart. Walmart is failing to adapt to Amazon. And on it goes.

They think about cutting their prices. And then they work on cutting their costs to match their collapsed revenue. And in the end all reputation is gone, all profit is gone, and a competitor with a better business model and more grasp of the current trends swoops in and eats your lunch. Until a generation later the same thing happens to him. Very few companies have ever remained at the top of the game for more than a few decades.


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## XHRTSP

I could see airlines codesharing with HSR, but it'd be a cold snowy day in Hell with the devil giving out free sleigh rides before Southwest or any other airline puts up billions of their money to fund some rail project. IMHO.


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## cirdan

XHRTSP said:


> I could see airlines codesharing with HSR, but it'd be a cold snowy day in Hell with the devil giving out free sleigh rides before Southwest or any other airline puts up billions of their money to fund some rail project. IMHO.


I don't think many of us are genuinely expecting them to fund it. But it would already be a step forwards if they start supporting it, and maybe showing some interest in operating it, or baing part of the consortium that will operate it.

In Spain, ALSA is not actually goping to build any high speed lines (any more that Southwest is building airports), but is going to seek to operate on them.


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## cirdan

jis said:


> cirdan said:
> 
> 
> 
> Virgin ran, and still runs a UK train franchise.
> 
> 
> 
> An observation about the relationship between _Virgin Trains_ and _Virgin Airlines_
> 
> _Virgin Trains_ has very little to do with _Virgin Airlines_ or _Virgin Atlantic Airways Limited_ in any direct way.
> 
> _Virgin Trains_ is a subsidiary the _Virgin Rail Group_. This subsidiary is 51% owned by _Virgin Rail Group_ and 49% by _Stagecoach_, a bus and train operating company.
> 
> _Virgin Group_ also owns 51% of _Virgin Airlines_, the rest being owned by _Delta Airlines_. It also wholly or partially owns two or three other airlines, directly or indirectly.
> 
> _Virgin Group_ also owns among other things - a couple of hotel chains, a soft drink company, several mobile telephone companies, a financial services company etc. etc. So it is truly a conglomerate of which the airline business partial ownership is but one aspect.
> 
> So to claim that _Virgin Trains_ is an example of an airline operating trains is a bit far fetched.
Click to expand...

When Virgin Trains first started operating, it was 100% Virgin. Stagecopach didn't come on board till later.

Many airlines own things like hotels, travel agencies, sometimes even catering arms or maintenance and engineering companies. These are managed separately from the core airline but are still part of the same group. I don't see an airline-run HSR being very different. This would be managed as a separate company with its own staff and assets. It's not going to be as if pilots are going to arrive for work in the morning without knowing whether they'll be given a train or a plane


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## Northeastern292

CHamilton said:


> Virgin America Leaves SJC [Airport] – But Wants to Operate HSR
> 
> 
> 
> 
> 
> 
> In what is seen as something of a blow to Mineta San José airport, Virgin America announced last week it would be leaving SJC even though they had just launched flights to LAX less than a year ago...
> 
> Officials had hoped success with the single SJC-to-LAX route would prompt Virgin America to add the real prize: Longer flights to East Coast and Midwest cities like Chicago, Boston, New York and Washington, D.C. — a major goal for city and business leaders.
> 
> This should not come as any surprise. We’ve known for years now that airlines see the most profits in medium and long haul routes, not in the short haul shuttle routes like SF to LA. In 2010 JetBlue’s CEO made the point explicitly...
> 
> Airlines make some profit on their SF-LA routes. But as fuel costs rise, those profits have shrunk. Given the immense cost of expanding airports, gate space is at a premium. Airlines would much rather use those gates for the more profitable medium and long haul flights than for more shuttle flights within California.
> 
> So what about the short haul routes? Do companies like Virgin and Southwest plan to just abandon those? Far from it. In fact, they would like to operate high speed rail on those routes, replacing air travel, according to Ben Tripousis of the California High Speed Rail Authority...
> 
> So the shape of transportation in California’s future is clear. The airlines would like to redirect existing gates to medium and long haul flights and replace the short haul flights with high speed rail. ...
> 
> More importantly, it shows that to the private sector, HSR is a big deal and very important to their future plans. Of course, it’s also beyond their ability to fund the capital costs, which is where government comes in.
Click to expand...

Virgin America operating out of SJC was a joke, especially as they have a huge operation at SFO. I don't understand why SJC is so empty, as San Jose is one of America's largest cities.


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## jis

cirdan said:


> When Virgin Trains first started operating, it was 100% Virgin. Stagecopach didn't come on board till later.
> 
> Many airlines own things like hotels, travel agencies, sometimes even catering arms or maintenance and engineering companies. These are managed separately from the core airline but are still part of the same group. I don't see an airline-run HSR being very different. This would be managed as a separate company with its own staff and assets. It's not going to be as if pilots are going to arrive for work in the morning without knowing whether they'll be given a train or a plane


The point is Virgin Atlantic Airways does not own anything other than the Virgin Atlantic assets.
Virgin Rail Operations is and was always owned either wholly or partially by Virgin Group, not by Virgin Airways. Virgin Group which was incorporated as a conglomerate in 1970 has been in existence for far longer than Virgin Atlantic Airways. Virgin Atlantic Airways was constituted in 1984 by acquiring an airline that was conceived by Randolph Fields and Alan Hellary to fly between London and the Falkland Islands, but with a rather unrealistic unachievable business plan. It was named Virgin Atlantic Airways upon completion of the acquisition in 1984 (75% owned by Virgin Group and 25% by one of the original owners, later bought out by Virgin Group) and made its first commercial flight in 1984 between Gatwick and Newark. It then was and still is a subsidiary of Virgin Group. Similarly Virgin Rail Group is another subsidiary of Virgin Group. Virgin Group helped Virgin Atlantic though difficult financial times by advancing it loans from Virgin Records (before Virgin Records was sold to EMI).

I believe that the Virgin brand name is one that many outside of UK became familiar with through the Virgin Atlantic Airways subsidiary and hence they mistakenly think that Virgin anything is owned by Virgin Atlantic Airways.


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## SarahZ

I absolutely love Virgin America and wish they'd branch into a HSR system (not to mention, add more airports to their system). If their trains were designed anything like their planes, I'd be a very happy girl.


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## Shawn Ryu

Northeastern292 said:


> CHamilton said:
> 
> 
> 
> Virgin America Leaves SJC [Airport] But Wants to Operate HSR
> 
> 
> 
> 
> In what is seen as something of a blow to Mineta San José airport, Virgin America announced last week it would be leaving SJC even though they had just launched flights to LAX less than a year ago...
> 
> Officials had hoped success with the single SJC-to-LAX route would prompt Virgin America to add the real prize: Longer flights to East Coast and Midwest cities like Chicago, Boston, New York and Washington, D.C. a major goal for city and business leaders.
> 
> This should not come as any surprise. Weve known for years now that airlines see the most profits in medium and long haul routes, not in the short haul shuttle routes like SF to LA. In 2010 JetBlues CEO made the point explicitly...
> 
> Airlines make some profit on their SF-LA routes. But as fuel costs rise, those profits have shrunk. Given the immense cost of expanding airports, gate space is at a premium. Airlines would much rather use those gates for the more profitable medium and long haul flights than for more shuttle flights within California.
> 
> So what about the short haul routes? Do companies like Virgin and Southwest plan to just abandon those? Far from it. In fact, they would like to operate high speed rail on those routes, replacing air travel, according to Ben Tripousis of the California High Speed Rail Authority...
> 
> So the shape of transportation in Californias future is clear. The airlines would like to redirect existing gates to medium and long haul flights and replace the short haul flights with high speed rail. ...
> 
> More importantly, it shows that to the private sector, HSR is a big deal and very important to their future plans. Of course, its also beyond their ability to fund the capital costs, which is where government comes in.
> 
> 
> 
> 
> 
> Click to expand...
> 
> Virgin America operating out of SJC was a joke, especially as they have a huge operation at SFO. I don't understand why SJC is so empty, as San Jose is one of America's largest cities.
Click to expand...

Because SFO and to a lesser extent OAK are taking their shares of passengers.


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## Devil's Advocate

Interesting topic and I do think a codeshare between airlines and HSR is a realistic goal if and when HSR becomes a reality. However, I do not believe that airlines owning or operating HSR in the US is likely to happen in our lifetimes.


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## cirdan

Devil's Advocate said:


> Interesting topic and I do think a codeshare between airlines and HSR is a realistic goal if and when HSR becomes a reality. However, I do not believe that airlines owning or operating HSR in the US is likely to happen in our lifetimes.


As discussed above, there are some rare examples of airlines having money in HSR.

It is interesting that the reverse is much more company. I don't know how many if any still surivive in this format, but some early airlines were started by railroads. In the 1930s the UK's Great Western started an air service and in several African countries the airlines were originally branches of the national railroads.


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## Blackwolf

cirdan said:


> It is interesting that the reverse is much more company. I don't know how many if any still surivive in this format, but some early airlines were started by railroads. In the 1930s the UK's Great Western started an air service and in several African countries the airlines were originally branches of the national railroads.









Though I don't believe they were anything more than a cargo airline, ATSF had their own planes (DC-4's I believe) for a while until the ICC made them get out of the flying business.


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## fairviewroad

To a very limited degree there is already an example of an airline code-sharing with rail in the US. You can purchase a United airlines "flight" on Amtrak

between EWR and New Haven, Stamford, Philadelphia and Wilmington. This arrangement dates back to the days of Continental Airlines. It's only valid

on NER trains (not Acela) and only as part of an itinerary that includes a flight to/from EWR.

So, not exactly on the same level and scope as an airline fully supporting HSR, but nevertheless it does show that an airline can work in tandem with

a railroad in markets where that makes sense.


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## jerichowhiskey

CHamilton said:


> More importantly, it shows that to the private sector, HSR is a big deal and very important to their future plans. Of course, it’s also beyond their ability to fund the capital costs, which is where government comes in.


Which is where the government should have been for Amtrak. SMH.


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## Texan Eagle

Shawn Ryu said:


> Northeastern292 said:
> 
> 
> 
> Virgin America operating out of SJC was a joke, especially as they have a huge operation at SFO. I don't understand why SJC is so empty, as San Jose is one of America's largest cities.
> 
> 
> 
> Because SFO and to a lesser extent OAK are taking their shares of passengers.
Click to expand...

SJC has a catchment area of about 2 million residents for whom it is more convenient than SFO or OAK. The reason Virgin America flopped out of SJC is because they started on the wrong foot. SJC-LAX is an extremely saturated market with every airline and their brother operating hourly flights. Virgin didn't bring anything of great value to that route since its a 1 hour jump and passengers don't really care what type of plane or services they get.

What Virgin should have done (and I hope they still do in the future) is go after the transcontinental market. Virgin's target audience is young hip fancy crowd, and on those 6-hour flights, Virgin's trademark hard product and in-flight services would actually be a factor to consider when booking over other airlines. If they go for SJC-JFK, SJC-IAD, SJC-BOS non-stops, I have a feeling that will work out for them.


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## George Harris

In Taiwan: Evergreen Shippping owns Eva Airlines (International), Uni Air (Local) and a large interest in the Taiwan High Speed Rail. Fubon Bank owns a fair chunk of the HSR. Have no idea what their relationship with Evergreen is otherwise.


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## Anderson

On SJC: My understanding is not only is the market to LAX saturated, but it is also at best a break-even market for many of the participants owing to its short distance and the intense competition. However, it also happens to be one of those markets nobody wants to give up, both because of the connecting business and because of the risk that cutting competition would have in letting the "other guys" jack up fares. Basically, any relative loss in that market is seen to be less than the relative losses associated with dropping it...not unlike the NYC/Pennsy situation back in the 60s.


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## NS VIA Fan

Blackwolf said:


> Though I don't believe they were anything more than a cargo airline, ATSF had their own planes (DC-4's I believe) for a while until the ICC made them get out of the flying business.


Air Canada has its beginnings as a subsidiary of CN.

Canadian Pacific once had airline routes from Hong Kong to South America and Europe to Australia. The upper deck lounge on the ‘747 was configured to resemble an oldtime railroad Parlour Car. (here's a CP 747 and a DC10 at Halifax......just in from Amsterdam)


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## Long Train Runnin'

A long time ago the Pennsy had a stake in this airline.


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## MARC Rider

Blackwolf said:


> cirdan said:
> 
> 
> 
> It is interesting that the reverse is much more company. I don't know how many if any still surivive in this format, but some early airlines were started by railroads. In the 1930s the UK's Great Western started an air service and in several African countries the airlines were originally branches of the national railroads.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Though I don't believe they were anything more than a cargo airline, ATSF had their own planes (DC-4's I believe) for a while until the ICC made them get out of the flying business.
Click to expand...

In the mid 1980s I used to ship water samples from BWI to the lab in Denver using Burlington Northern Air Freight. This ended by 1990 when our agency finally got a contract with FedEx, which was a lot more convenient than having to drive to the airport every day to drop off our coolers.

They were bought by DB logistics in 2006, so it was owned by a railroad again, but then the owners decided to end the air service in 2011.

https://en.wikipedia.org/wiki/Burlington_Air_Express


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