Why airlines will not give up their Malaysia-Singapore flight fight

Described as a game-changer, the recent high-speed rail link deal between Malaysia and Singapore stirred up considerable buzz on both sides of the causeway. Jointly announced by both heads of government, it is perceived as both blight and an advantage – causing airline stocks to dip and stock market prices to fluctuate.

Set to be completed by 2020, the Kuala Lumpur-Singapore high-speed train presents a 90 minute journey between the cities. Whereas a direct flight will take an approximate three hours, including airport transfers and immigration queues.

In a recent survey by HRG, it was revealed that business travellers are three times more likely to choose rail over air for rail journeys that are less than three hours. Taking this into account, the upcoming high-speed train seems to be the discerning choice for commuters.

Nonetheless, air travel between the two cities are certainly not about to give up without a fight.

With a current average of 3 flights to Kuala Lumpur leaving Singapore every hour, airlines provide the greatest flexibility and availability to business travellers, who are often faced with shifting schedules. As such, a grand total of 10 airlines ranging from budget airlines to national carriers proffer 668 flights per week between both destinations.

The aggressive competition generated among the carriers thereafter provided constant and cyclic promotions of cheap airfare for the route. With usual airfare prices averaging from $80 - $100, the introduction of the new bullet train may trigger competition that will see further reductions on airfare.

Ticket prices aside, the location of the train station and the ease of immigrations are two very important factors when deciding on mode of transport.

As more and more travellers are beginning to take into account the door-to-door journey of a trip, transition time is an essential factor taken into account as airport transfer, check-in, security and waiting times at airports can easily stretch a 45-minute plane ride to a three hour journey.

Although high-speed rail has proven to be largely successful in a number of cities globally, high-speed rails have also seen cases where it played witness to being the dark horse of transportation.

A good example would be the introduction of the high-speed rail in China. While airlines catering for the Beijing - Shanghai route initially faced stiff competition from the rail, they saw rebounds on their capacity and airfare a year after as commuters realised an underperforming high-speed rail system.

Overall the ability of this rail link to transport travellers between Singapore and KL in a mere 90-minutes is a promising alternative for travellers and will, without a doubt, have a huge impact on our travel options between the two cities.

While this preference may cause airline passenger volume for the Singapore-KL route to decrease, it is unlikely that the airline routes will be immediately displaced by the high-speed train when it is introduced in 2020.

However it is difficult to say with certainty how much airlines’ businesses will be affected once the high speed rail is up due to the lack of information that is available about the project.

For instance, business travellers enjoy the flexibility of having close to 30 flights a day to choose from but as information about train schedules is currently unavailable it is hard to determine whether their preferences would switch to rail or remain with air.

For this reason it would be crucial for airlines to monitor the situation prior to assessing what, if any, changes should be made to flight frequencies before the launch of the high-speed rail.

It will be fascinating to see how this plays out, the airline industry is one of the most competitive in the world and the airlines will rise to the challenge of the rail alternative.