Fewer seats, resilient frequencies: Impacts of large-scale High-Speed Rail liberalisation on air transport supply

Daniel Albalate, Albert Gragera and Pere Suau-Sanchez
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Daniel Albalate: Departament d’Econometria, Estadística i Economia Aplicada, Universitat de Barcelona, Spain; Institut de Recerca en Economia Aplicada (IREA-UB), Spain.
Albert Gragera: Departament d’Economia Aplicada, Universitat Autònoma de Barcelona, Spain.
Pere Suau-Sanchez: Faculty of Economics and Business, Universitat Oberta de Catalunya, Spain; Faculty of Engineering and Applied Sciences, Cranfield University, UK.

No 202514, IREA Working Papers from University of Barcelona, Research Institute of Applied Economics

Abstract: This paper examines the liberalisation of high-speed rail (HSR) as a driver of intermodal competition in long-distance passenger transport. While previous research has primarily focused on the effects of HSR infrastructure deployment on aviation, less is known about how opening HSR markets to new entrants reshapes this competition. Drawing on the Spanish HSR liberalisation in 2021, we are the first to evaluate the causal effects of a large-scale liberalisation on competing air transport supply. Using a regression discontinuity design, we find significant long-term reductions in airline seat supply (10- 16%), but limited impact on frequencies. We then uncover two mechanisms underlying these results. First, airlines’ primary response was to down-gauge aircraft. Second, a market share emerged from the need of legacy carriers to preserve frequencies to feed their hub. Our results underscore the broad and significant implications of liberalisation for intermodal substitution.

Keywords: Airlines; High-speed Rail; Liberalisation; Intermodal Competition; Transportation. JEL classification: L43; L51; L92; L93; R41; R42. (search for similar items in EconPapers)
Pages: 41 pages
Date: 2025-11
New Economics Papers: this item is included in nep-com and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:ira:wpaper:202514

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