In order to further enhance service quality and meet the diversified travel needs of passengers, the railway department will implement a fare adjustment for some high-speed rail lines starting from June 15, 2024. The changes in fares involve the Wuhan-Guangzhou section of the Beijing-Guangzhou high-speed rail, the Shanghai-Hangzhou section of the Shanghai-Kunming high-speed rail, the Hangzhou-Changsha section of the Shanghai-Kunming high-speed rail, and the Hangzhou-Ningbo section of the Hangzhou-Shenzhen railway. For high-speed trains operating at speeds of 300 kilometers per hour or higher on these lines, the railway department plans to adopt a more flexible pricing mechanism that factors in season, date, time, and seat type while ensuring a price cap, thereby establishing a discount fare strategy that includes both price increases and possible decreases.
In detail, after the adjustment, the upper limits of some fares on multiple lines will increase. For example, the second-class seat from Hangzhou East Station to Ningbo Station on the Hangzhou-Ningbo section of the Hangzhou-Shenzhen railway will rise from 71 yuan to 85 yuan, an increase of about 19.72%. Similarly, the second-class fare on the Hangzhou-Changsha section of the Shanghai-Kunming high-speed rail from Hangzhou East Station to Changsha South Station will increase from 405 yuan to 485 yuan, an increase of about 19.75%. There are similar adjustments on the Shanghai-Hangzhou section of the Shanghai-Kunming high-speed rail and the Wuhan-Guangzhou section of the Beijing-Guangzhou high-speed rail.
However, as stressed by the railway department, this fare adjustment is not only about increases but also comes with significant reductions in the lowest fares. For example, the lowest fare from Wuhan Station to Guangzhou South Station will drop to 304 yuan, a reduction of about 34%. Similarly, the lowest fare for second class seats on the Shanghai-Hangzhou section of the Shanghai-Kunming high-speed rail will drop to 48 yuan, with a similar reduction of approximately 34%.
The announcements of these fare adjustments state that the fare system will fluctuate from the current published price as the cap down to a minimum of 55% off, implementing multiple levels of discounts to offer a range of price options to better meet the needs of different travelers. Through this approach, the railway department seeks to further optimize services while meeting the travel needs of passengers.
Taking into account the latest high-speed train fare adjustments, it has been understood that there have been fare adjustments on many high-speed lines since last year. Starting from May 30, 2023, fare optimizations were implemented on multiple lines, including the Liuzhou–Nanning high-speed railway, the Jiaozhou-Jinan high-speed railway, the Nanning-Guangzhou high-speed railway, as well as price adjustments for trains running at speeds of 300 kilometers per hour and above on the Ningbo-Hangzhou high-speed railway and the Shanghai-Nanjing Intercity. The involved high-speed rail sections adopted price ceilings and floors, with an adjustment range of about 10% to 20%.
In an ongoing effort to improve the onboard experience and service quality, respective departments cordially invite passengers to choose high-speed rail as their mode of travel. Ticket discount policies for specific groups such as children, students, disabled military personnel, and disabled police officers remain unchanged, with the minimum fare reserved to the whole yuan, and parts less than one yuan are rounded up or down accordingly.
In response to this fare adjustment, the China Railway Corporation explained that the move is a normal market practice and hinted at further improvements in service quality. The objective of the fare optimization for certain lines is to stimulate demand through innovation in passenger transport products, to promote passenger flow growth through market mechanisms, and to comprehensively improve service quality.
China’s railway dynamic pricing system has been in place for many years. Taking the Beijing-Shanghai high-speed railway as an example, it has optimized fares based on season, time, and seating class for its high-speed trains. With its exploration into market-based pricing, the Beijing-Shanghai high-speed railway hopes to improve services as well as its own profitability through practical experience.
However, there is still no conclusion as to whether the pricing mechanism for train tickets will be adjusted year after year, as it is currently still in the exploratory stage. The adjustment of high-speed rail ticket prices depends not only on the passengers’ ability to pay and the level of regional economic development but also takes into consideration the competition with other modes of transport. For passengers who are sensitive to prices and less concerned with scheduling, the dynamic pricing mechanism of high-speed rail could mean lower travel costs.
After restructuring, the price structure of high-speed rail tickets has started to diversify. Even on the same day and the same route, different trains might have different price tiers. This change means that passengers can pick the most suitable train like they would select a flight, based on their preferences and needs. Experts point out that this flexible adjustment of ticket prices not only increases the railway’s market responsiveness and accelerates the marketization process of the national railway group but also helps to improve the revenue prospects and operating environment of the railway industry. It enhances attractiveness to social capital, thus promoting the ecological quality and development of the railway industry.
According to public data, with the positive trend in the domestic passenger transport market, the national railway group saw significant improvement in operational efficiency last year. In 2023, the group’s operating revenue reached 1,245.4 billion yuan, a 10.5% increase year-over-year, with a total net profit of 33 billion yuan. Entering the first quarter of 2024, the operating revenue of the railway group has already reached 283.3 billion yuan, a 4.2% increase compared to the same period last year. The head of the financial department of the group introduced that in 2023, the railway passenger performance reached a historic high, with the national railway transporting a total of 3.68 billion passengers. On peak days, the number of passengers exceeded 20 million, setting a historical record. In the first quarter of 2024, many passenger transport indicators continued to reach historic highs, with the railway transporting 966 million passengers, a 27.9% increase year-over-year. By the end of 2023, the group’s debt-to-assets ratio was 65.54%, a decrease of 0.84 percentage points from the previous year, indicating a steady increase in the quality of railway development.
The person in charge also mentioned that in the next phase, the national railway group will continue to advance the construction of a modern railway management system, adhere to market-oriented, legal, and international development paths, deepen reform and innovation efforts in the railway industry, and strive to increase passenger and freight volumes. They will strengthen budget management comprehensively, promote the integrated operation of transport and non-transport businesses, and continue to implement cost-saving measures to enhance the operation quality and efficiency of the enterprise.
It is worth noting that the performance trend of the listed company Beijing-Shanghai High-Speed Railway (601816.SH) in the first quarter of this year is also very promising. In 2023, the Beijing-Shanghai High-Speed Railway achieved a revenue of 40.683 billion yuan, a dramatic increase of 110.40% year-over-year, and the net profit attributable to the parent company reached 11.546 billion yuan, turning from a loss in the same period of the previous year into a profit, with the net profit growth rate reaching 2103.63%. In the first quarter of 2024, the operating revenue of the Beijing-Shanghai High-Speed Railway increased again to 10.106 billion yuan, a year-over-year increase of 13.06%, with the net profit attributable to the parent company reaching 2.963 billion yuan, a year-over-year increase of 33.11%.
In the realm of transportation competition, high-speed rail’s direct competitors include other modes of transport such as roads and civil aviation. In the short-haul market, within 100 kilometers, road transport holds a favorable position with advantages such as frequent services and flexibility. In the medium to long-haul market, between 100 to 1000 kilometers, high-speed rail demonstrates significant advantages with characteristics like high punctuality, large passenger capacity, high comfort levels, and less susceptibility to weather conditions. In the long-haul passenger market, spanning 1000 to 1500 kilometers, high-speed rail and civil aviation each have their unique features, making for a highly competitive environment.
In the hustle and bustle of modern society, choosing the right mode of transportation has become a part of our daily lives. Different modes of transportation have their own advantages and characteristics, and our choices often depend on a variety of factors such as distance, cost, time, and personal preferences.
So, in your regular travels, which mode of transportation would you tend to choose? Is it the fast-paced airplane, the flexible convenience of driving yourself, or the eco-friendly public transport? Or do you prefer cycling or walking, enjoying the scenery and culture along the way?
We invite you to share your travel choices and reasons in the comment section, so we can explore the diversity of modern travel methods and their impacts on the environment and society together.
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