4 ms·

Why is train so much more expensive? Surely jets that cost $100s of millions, supported by massive airports, are more expensive? Seems like the market distort

Why is train so much more expensive? Surely jets that cost $100s of millions, supported by massive airports, are more expensive? Seems like the market distortions are subsidies to airlines of some sort.

qeternity 4y ago
Competition, and the subsidies are the other way around: many train companies receive them, and most airlines don't.
- throwaway049 4y ago
  I'd argue that not pricing in the negative externalities of flying amounts to a subsidy.
  - qeternity 4y ago
    I’d agree with you except that EU airlines have to participate in the cap and trade system (ETS), whereas trains do not.
the_why_of_y 4y ago
Jet fuel is tax free in the EU, a huge market-distorting subsidy: https://en.wikipedia.org/wiki/Kerosene_tax https://en.wikipedia.org/wiki/Kerosene_tax However, as of 2018, commercial kerosene consumption is currently tax exempt under the legislation of all member states of the European Union.
- Tpt 4y ago
  Rail lines are massively subsidized and the French government is regularly bailing out SNCF (the national rail company). So imho it not clear that the global market distortion is in the favor of plane.
  - doikor 4y ago
    Many airports are also subsidized. Basically every kind of transportation is subsidized to the point that figuring out the true cost is really hard.
  - lores 4y ago
    Just like cars are heavily subsidised through motorway building. Every form of transport receives subsidies as a public good, even in countries where transport infrastructure is nominally privatised. This is one area where letting the free market decide invariably ends in disaster.
- throw0101c 4y ago
  > Jet fuel is tax free in the EU, a huge market-distorting subsidy: Also, are the externalities of jet exhaust taken into account? Is there any kind of carbon pricing in EU/France?
mojuba 4y ago
I suspect in case of the Eurostar high speed train they simply follow the airline ticket pricing for the same destinations and add their "convenience tax" on top of it, usually around £50. Saying this because I've noticed that their prices fluctuate together with airline ones, and they fluctuate wildly.
- fmajid 4y ago
  Yes, despite being state-owned, Eurostar operates like a classic price-maximizing monopoly. Thalys is much cheaper, I wonder what will happen now the two are merging. Hopefully Renfe will launch its competing service soon on the London to Paris route.
mannykannot 4y ago
High-speed railway infrastructure is expensive, and so is a modern high-speed train, which is not technologically less sophisticated than an airliner.
tyingq 4y ago
Do trains in France use the same sort of demand-driven pricing scheme airlines use? People tend to estimate airline pricing based on the cheapest price they see, which is often a fraction of the cost when demand changes.
- my123 4y ago
  > Do trains in France use the same sort of demand-driven pricing scheme airlines use? For the high-speed trains, yes.

qeternity 4y ago

Competition, and the subsidies are the other way around: many train companies receive them, and most airlines don't.

throwaway049 4y ago
I'd argue that not pricing in the negative externalities of flying amounts to a subsidy.
- qeternity 4y ago
  I’d agree with you except that EU airlines have to participate in the cap and trade system (ETS), whereas trains do not.

the_why_of_y 4y ago

Jet fuel is tax free in the EU, a huge market-distorting subsidy: https://en.wikipedia.org/wiki/Kerosene_tax https://en.wikipedia.org/wiki/Kerosene_tax However, as of 2018, commercial kerosene consumption is currently tax exempt under the legislation of all member states of the European Union.

Tpt 4y ago
Rail lines are massively subsidized and the French government is regularly bailing out SNCF (the national rail company). So imho it not clear that the global market distortion is in the favor of plane.
- doikor 4y ago
  Many airports are also subsidized. Basically every kind of transportation is subsidized to the point that figuring out the true cost is really hard.
- lores 4y ago
  Just like cars are heavily subsidised through motorway building. Every form of transport receives subsidies as a public good, even in countries where transport infrastructure is nominally privatised. This is one area where letting the free market decide invariably ends in disaster.
throw0101c 4y ago
> Jet fuel is tax free in the EU, a huge market-distorting subsidy: Also, are the externalities of jet exhaust taken into account? Is there any kind of carbon pricing in EU/France?

mojuba 4y ago

I suspect in case of the Eurostar high speed train they simply follow the airline ticket pricing for the same destinations and add their "convenience tax" on top of it, usually around £50. Saying this because I've noticed that their prices fluctuate together with airline ones, and they fluctuate wildly.

fmajid 4y ago
Yes, despite being state-owned, Eurostar operates like a classic price-maximizing monopoly. Thalys is much cheaper, I wonder what will happen now the two are merging. Hopefully Renfe will launch its competing service soon on the London to Paris route.

mannykannot 4y ago

High-speed railway infrastructure is expensive, and so is a modern high-speed train, which is not technologically less sophisticated than an airliner.

tyingq 4y ago

Do trains in France use the same sort of demand-driven pricing scheme airlines use? People tend to estimate airline pricing based on the cheapest price they see, which is often a fraction of the cost when demand changes.

my123 4y ago
> Do trains in France use the same sort of demand-driven pricing scheme airlines use? For the high-speed trains, yes.