Co-operation between the air and rail industries is set to grow as air space becomes an ever scarcer commodity

Europe's airlines have had little cause to welcome their region's heavily-subsidised rail industry. However, after years of suspicion, co-operation appears to be breaking out. Even for the USA, where rail is far more marginal, there are some signs of life. But it is in Europe where the main developments lie. And the catalyst for renewed interest has been the limits on airport capacity. This has pushed some of the majors to look at rail as an alternative for shorter haul feeder services - thus freeing up much-needed capacity for more medium- and long-haul flights at their congested hubs.

Germany, which has long been under environmental pressure to increase rail use, remains at the forefront. Lufthansa plans to utilise Deutsche Bahn's (DB's) ICE high-speed network for baggage-through check-ins at rail stations on certain domestic routes, starting with Frankfurt Airport to Stuttgart. If this proves successful, the idea will be extended to certain other short-haul routes and could free up 5%of Frankfurt Airport's 460,000 annual flight movements - equivalent to a year of growth.

Europe's regional carriers see things differently. Their feeder role and shorter sector lengths bring them into more direct conflict with what they argue is an unfairly subsidised and politically promoted rail sector. Regional flights in Europe average around 530km, which puts them largely within the total 3-4 hour journey time which is the equilibrium point for air/rail market share (see graph on page 108).

Despite the doubts among regionals, the air and rail industries have increasingly been co-operating when it comes to airport-city links, providing quick access between airport and city centres in places as far flung as London and Oslo. Madrid too is building what will be the first downtown metro station check-in facility in the world. However, while city centre rail links have traditionally been seen as complimentary to air services, this has not always been the case with high speed trains.

For high-speed and city centre transits alike, visions of seamless travel are premature. There are still problems to be overcome, such as baggage handling. When baggage is checked in at an airport there are well defined security procedures which have to followed. If the check-in is at a rail station, then the challenge is to replicate the airport security in a different environment. At London's Paddington Station, for example, baggage is put into containers and transferred to the front of the Heathrow Express air-rail link through an underground tunnel.

Of course, this baggage must then be taken to the airport. In the case of the Frankfurt-Stuttgart link, DB has been forced to take out second class seats to make space for baggage, which means the seats are not available for the rest of the route served by the ICE. The German railway also has to invest in baggage containers and transport vehicles.

At the same time, Frankfurt airport has extended the automated baggage conveying system at both terminals to connect with the ICE rail system - essential to guaranteeing minimum train-to-plane transfer times. Again, transport vehicles and personnel will be needed.

So, despite the fact that there will only be 46 seats available on the service for Lufthansa passengers, considerable investment has been made. At the moment, the low volumes involved means that Frankfurt-Stuttgart flights will be continued. Lufthansa is using this pilot project to test market reaction and to gain experience of joint operation of two different modes of transport.

In terms of time, the rail service should certainly be competitive, with a 73min journey time compared with the nominal 55min of the air service - presuming there are no delays.

Once it has had a chance to test the market reaction, Lufthansa may well extend the idea to other short-haul destinations. At the end of next year, the ICE network will be widened to include Cologne and Düsseldorf.

Lufthansa plans to widen its co-operation with DB to these destinations, which are roughly the same distance from Frankfurt as Stuttgart. Nuremberg, to the east of Frankfurt, is another possibility. However, if the Stuttgart experiment fails to gain acceptance, Lufthansa says it will continue to operate these short flights to prevent customers migrating to other networks.

French connection

In France, co-operation between air and rail is also on the increase, albeit at a less sophisticated level. A number of carriers have codeshares with state-owned domestic rail operator SNCF, including Lufthansa, American Airlines and United Airlines.

Andrew Sharp, director of the International Air Rail Organisation (IARO), says that one of the reasons for these codeshares is the difficulty that foreign carriers have had in breaking into the French market. Air France has a dominant presence in the country's regional airline sector, with only Swissair providing an alternative of any size -and Swissair's affiliates have been extremely unprofitable. This is due largely to competition from Air France, its affiliates and heavily-subsidised TGV high-speed trains.

Air France itself has struggled to compete with the TGV, and chairman Jean-Cyril Spinetta has said that the carrier will not hesitate to pull out of routes that become unprofitable as the TGV network is extended. Indeed, the carrier has opted to co-operate: Air France's hub at Paris Charles de Gaulle (CDG) has its own dedicated station on the TGV network, and Air France has cut its CDG-Brussels service, opting instead to sell seats on the TGV offering.

In comparison to its main continental competitors, London Heathrow lags far behind in terms of high-speed links, although it does have the Heathrow Express providing a 15-minute transit to the city centre. Long term, there is talk of extending this from Paddington to King's Cross, which would provide links to high-speed rail networks to the north. This is very much a long-term plan, however.

In the meantime, less ambitious plans are being considered, although even these are some way off. One possibility would be a link from Heathrow onto the rail networks serving cities to the west of London (such as Oxford, Reading and Bristol).

In the shorter term, there are moves to improve integration at a more practical level. For instance, transport industry consultant and former UK transport minister Steven Norris is pushing for more information sharing between the different modes. "Why not integrate information from different transport modes into the same network?" he asks. Norris is particularly critical of stations which have inadequate signposting. "For proper integration, we should think about directions from the ignorant passenger's standpoint," he argues, pointing out that many passengers may be using the station for the first time.

While many of these measures require common sense above all else, providing through tickets covering both the rail and air sectors of a journey is proving more of a problem, given the different systems which have been developed by the respective industries.

To get around this problem, airlines often issue coupons to their passengers, which means that they have to queue for their tickets like anyone else. As Martina Priebe, director of the industry pressure group Air Transport Action Group (ATAG) points out, this hardly counts as intermodalism in the true sense of the word.

The problem, essentially, is that rail companies are not geared up to accepting air tickets. They have their own systems in place. Priebe predicts that with the advent of e-ticketing, where passengers just have a reference number, this problem may eventually go away.

Many rail stations have automatic ticket barriers which were specifically designed for rail tickets, and, in general, those involved in trying to promote interconnectivity between the rail and air industries report that progress is slow. "Rail is not ready for it" Priebe complains. "There is a lack of vision. People are fixing bits and pieces rather than looking at the wider picture."

That said, some airlines are making a tidy profit by selling rail tickets to their captive audience - the air passengers. One industry observer estimates that low-cost Ryanair, which sells Stansted Express tickets, makes a £500,000 ($725,000) annual profit on this service.

Of course, carriers can smooth journeys for their customers by offering free tickets. With its new Newark-London Stansted service, Continental Airlines is providing its Business First passengers with free business class tickets on the Stansted Express rail service into central London, with back-of-cabin travellers paying half price.

A further opportunity, particularly for low-cost carriers such as Ryanair, will come with the opening of a new airport 200km south of Madrid, which is being built on Spain's AVE high-speed rail link between Madrid and Seville. This will allow 50 minute transfers into the centre of Madrid, comparable with the 30 minute taxi ride from Madrid Barajas Airport. The airport is due to open in 2004 and hopes to be catering for 780,000 passengers by the year 2008.

In short, it is clear that co-operation between rail and air transport is set to grow, and not just in the provision of rail links to city centres, but also in providing an alternative on some short haul routes.

This obviously leads onto the issue of market share and indirect subsidies. On the first issue, it is difficult to generalise but the 3h 30min mark seems to be the point at which rail and air have an equal market share. Below this, rail predominates and beyond this, air transport quickly gains ground.

When the Channel Tunnel opened, providing a link between Paris and London which falls roughly in this 3-4 hour category, BMI british midland found that the overall size of its market remained about the same. Admittedly, the rail sector gained share but it did so as a function of a rise in the overall market, apparently without damaging the carriers' numbers. BMI has an "interline" agreement with rail operator Eurostar allowing business travellers reciprocal use of services.

On the question of subsidies, many in the industry argue that despite the crack down in the European Union (EU) on direct subsidies, rail in effect gains from an indirect subsidy as, in general, rail operators do not pay charges for the full cost of infrastructure. Although there are moves to cut down on this, regional carriers in particular complain that not enough is being done. The European Regions Airline Association (ERA) estimates that 38%of Europe's railways income came from subsidies, although this is based on data from 1997.

However, Andrew Sharp at IARO estimates that Europe's high speed networks are, if not more profitable, at least more commercially viable than many commuter and regional routes, and that it is the latter which are really being subsidised.

US experience

While Europe may have its problems, they are at least ahead of their counterparts in North America. "In the USA, intermodalism is very much the exception," says Scott Leonard, assistant director of pressure group the National Association of Railroad Passengers.

Codesharing between the US rail system, Amtrak, and the nation's airlines is limited to a short-lived experiment a decade ago in which the original Midway Airlines listed as a flight an Amtrak train between Philadelphia Airport and the gaming resort of Atlantic City. Part of the reason for this state of affairs is found in incompatible infrastructure.

"There's very little co-ordination between local planners and airport planners," says Leonard. The few airports that have inter-city passenger train service have it by chance, he says.

An example of this coincidental service is Baltimore-Washington Inter-national Airport, which is served by an Amtrak station that requires a short and free bus ride. Some of the trains that stop at BWI are Amtrak's new challenge to the airlines in the Washington/New York/Boston corridor - the Acela.

Begun in autumn 2000, Acela Express trains run between Washington DC, and New York in a challenge to the hourly air shuttles operated by Delta Air Lines and by US Airways. At 215km/h, the Acela trains bring the trip down to two hours and 30 minutes from about three hours before.

While the air shuttles spend less than an hour airport to airport, Amtrak argues that transfer time between New York's LaGuardia Airport and Manhattan takes so long that its door-to-door time is competitive. "The taxi trip between LaGuardia and midtown", quips an Amtrak spokesman, "is our best selling point."

Two other Northeastern US airports stand to gain Amtrak access: Newark International Airport, which is adjacent to the tracks of the Northeast Corridor, will have a link to Amtrak trains when a new rail station opens as early as the end of this year, although to reach the Amtrak station, fliers will have to ride a monorail from the airport terminals.

In the next two to three years, Providence Airport in Rhode Island is scheduled to receive a station, which will also have an Amtrak link. On the West Coast, the Burbank Airport in California also has a rail stop nearby, served by Amtrak's western operation. If a long-envisioned high-speed rail corridor wins federal funding, airports in Cleveland, Indianapolis and Milwaukee could eventually have links to high-speed trains.

What seems certain, however, is that with air congestion becoming worse each year, the rail industry, and the major carriers, stand to gain as much through co-operation as competition.

Source: Airline Business