Air France-KLM is believed to be considering a high-speed rail service to compete against train operator Eurostar. French national rail operator SNCF says the airline is interested in launching services when Europe's rail industry is deregulated in 2010, but Air France-KLM is refusing to comment.
Eurostar, currently the only rail operator in the highly profitable London-Paris and London-Brussels markets, has steadily eaten into the market share of network carriers in recent years.
Rail consultant Adam Simmons says that such a move, while raising plenty of questions, would open up a number of possibilities. "Would the rival just replicate Eurostar's network or try to expand the attractiveness of high-speed rail?" he says. "London-Amsterdam is an obvious market."
Possible partners for Air France-KLM include Virgin Group and Stagecoach, which own UK-based Virgin Trains France's First group Veolia and UK bus/train operator Arriva, says Simmons. "But if expansion into Germany were to be considered, which is not unreasonable given the upcoming high-speed line to Cologne, why not Deutsche Bahn?"
Simmons says, however, that rail operators need to adjust their fare structures to compete against low-cost airlines on longer distance routes.
Source: Airline Business
