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

Author

Listed:
  • 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.)

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.

Suggested Citation

  • Daniel Albalate & Albert Gragera & Pere Suau-Sanchez, 2025. "Fewer seats, resilient frequencies: Impacts of large-scale High-Speed Rail liberalisation on air transport supply," IREA Working Papers 202514, University of Barcelona, Research Institute of Applied Economics.
    • Handle: RePEc:ira:wpaper:202514
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    File URL: http://www.ub.edu/irea/working_papers/2025/202514.pdf
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    References listed on IDEAS

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    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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