High-Speed Rail and Low Cost Carrier Competition in Japan: the Effects of Air Transport Liberalization on Inter-Modal Transport Systems

摘要

The effect of introducing low cost carriers (LCCs) into the Japanese aviation market in 2012 is unknown. In the context of Japan’s transportation system, there is skepticism over the ability of LCCs to provide discounts to the consumer due to slot limitations at primary Tokyo airports. There also exists skepticism about the ability of LCCs to take a significant market share away from legacy carriers and high-speed rail (HSR). Using actual fare data and transport time estimations for LCCs, legacy carriers, and rail in Japan, this paper first attempts to demonstrate which modes of transportation have a clear dominance from a cost or time perspective (or both) to a series of origin and destination pairs in Japan. Secondly, this paper attempts to identify the characteristics of origin and destination pairs which lead to the dominance of one mode of transportation over another. This paper finds that the actual fare discount of LCCs over legacy carriers and HSR is beyond the 35% discount estimated by previous research. As a result of these deep discounts, LCCs may garner a larger market share of passengers that previously estimated. LCCs gaining market traction may result in the growth of the aviation sector as well as the economic growth of supporting industries. However, in Japan’s case where a mature HSR network already exist, a shifts away from HSR to air transportation could affect Japan’s ability to meet long term energy reduction policies while concurrently stimulating growth in the aviation industry.