Study On Pricing Strategy Of Chinese High-speed Rail Under Aviation Competition

With the rapid development of economy,the transportation industry has changed a lot.Particularly,the high-speed railway which represents the modern transportation shows a strong momentum of development.In the high-speed passenger transportation market,various methods have been carried out by airline company such as tickets discount,lower fuel taxes resulting in relatively lower attendance in high-speed railway and thus lower earnings by high-speed railway.Therefore,the convenient,fast,and efficient high-speed railway cannot serve the public effectively.Learning from the experience of developed countries,it is very important to set a reasonable ticket price for the high-speed railway company to solve the above problems.Based on the ticket price of airline company,the strategy to make a scientific and reasonable ticket price for high-speed railway company is the main problem in this paper.The pricing strategy and the pricing factors were analyzed firstly in the paper.Combined with the characteristic of the ticket price in the major foreign high-speed railway country and the status of high-speed railway pricing strategy in our country,the major problems of high-speed railway pricing strategy were raised in this paper.And then by comparing with airline company,we analyzed the advantages and disadvantages of the high-speed railway.Based on the passenger travel options and travel choice,we used the Logit competition model to determine high-speed railway and aviation passenger traffic sharing rates at different transportation distances.We obtained that almost all of the passengers chosen high-speed railway within 600 km traveling distance,and the competition between high-speed railway and aviation passenger traffic is very fierce when the traveling distance range from 600 km to 900 km.However,almost all of the passengers chosen the aviation traffic when the traveling distance larger than 900 km.Finally,we built the high-speed railway pricing model based on the theoretical basis and competition mentioned above,which is within the scope permitted by the government.What’s more,we analyzed the influencing factor of the pricing and raised the double layers solver algorithms.In the research process,we not only took into account the selected transportation fares,time,comfort of the transportation and waiting time,but also took into account the transportation time and costs within the city.Thereby,we established a benefit function and proposed the double layers solver algorithms in which the high-speed railway will have a lager benefit while the passengers cost lowest.Finally,we took the Beijing-Shanghai high-speed railway as an example and analyzed the data.We found the relationship between the upper and lower model by reaction function.Therefore,the double layers model can be transformed into a single layer model.The tickets price of high-speed railway was calculated by MATLAB.Ensure the model’s constraints,based on the determined passenger generalized travel cost is minimal at different stages of the transport distance high-speed rail fares to maximize their profits.We obtained the tickets price which can ensure the widened meaning which can ensure the widen meaning of the tickets price is the lowest while the company benefit is the highest.