China's Low Cost Competition

US airline competing for domestic business need to consider that things could be even tougher if they had to compete with trains. ATW reports China is working hard to expand their rail network and the recent opening of the new Qinghai-Tibet line has forced airlines to reduce fares by 55% to compete. Consider also that these aren't just your run-of-the-mill choo choo trains...these are the trains capable of up to 300 kph (that's 186 MPH my US friends). As China's rail growth continues the pressure for their national airlines to compete for that domestic business is going to increase dramatically. US airlines are lucky that, save for a few regions, they need only compete with other airlines.