Airport subsidy for air-HSR intermodal service in a multi-airport system: Direct amount vs. discount

Yingzhi Wang, Xiushan Jiang and Chuanzhong Yin

Transportation Research Part A: Policy and Practice, 2025, vol. 200, issue C

Abstract: Integrating air transport and high-speed rail (HSR) to provide air-HSR intermodal services (AHIS) can coordinate transport resources, enhance airport connectivity, and improve the environment. This paper develops a game model to investigate the optimal rates and market outcomes of airport subsidy schemes for AHIS passengers within a multi-airport system (MAS), considering monopoly and duopoly structures in the airline market as well as typical MAS governance structures (private individual, private group, and public group operations). We analyze a direct amount subsidy with a fixed amount of money and a discount subsidy dependent on AHIS prices. Our analytical findings show that, compared with no subsidy, the direct amount subsidy increases the AHIS price, AHIS traffic and total traffic, and consistently enhances consumer surplus in monopoly markets and social welfare in duopoly markets. Its positive impacts on the secondary airport's profit and the airport system's total profit are conditional on private ownership and higher secondary airport charges. In duopoly markets, when a public airport group implements subsidies, the discount subsidy yields a higher AHIS price and operator profit but reduces the secondary airport's profit compared to the direct amount subsidy, with identical effects on other outcomes. Numerical simulations and a case study of the Chengdu-Nanchong-Shanghai market suggest that the direct amount subsidy has a robust advantage in traffic growth, while the welfare implications of subsidies require careful consideration of the subsidy implementer and market circumstances. These findings provide strategic guidance for designing context-specific airport subsidy schemes to promote the development of AHIS and effective management of MAS.

Keywords: Air-HSR cooperation; Air-HSR intermodal service; Subsidy; Multi-airport system; Game model (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0965856425002654
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:transa:v:200:y:2025:i:c:s0965856425002654

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.tra.2025.104637

Access Statistics for this article

Transportation Research Part A: Policy and Practice is currently edited by John (J.M.) Rose

More articles in Transportation Research Part A: Policy and Practice from Elsevier
Bibliographic data for series maintained by Catherine Liu ().