Considering discount airlines, Texas high-speed rail not viable monetarily

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At the Texas Tribune Festival’s high-speed rail panel, panelists discussed the possibility of bringing the title mode of transportation to Texas. While the panel had diverse representation supporting high-speed rail, the unexpected absence of the panel’s only rail critic led to a narrow-minded discussion of long-distance transportation options.

The premise of the panel discussed Texas Central Railway’s high-speed rail project aimed at connecting Dallas to Houston — with eventual connections to Austin, San Antonio and Fort Worth — with 400-person capacity “bullet trains” leaving every half hour during peak hours and arriving at their destination in 90 minutes at 80 percent of the costs of a similar flight. High-speed trains are not a new idea in Texas, but what makes this project unique is its attempt to be completely privately funded with zero operating subsidies — an unprecedented feat.

Flights from Dallas to Houston average one hour, and when considering a window of complications and security, let’s round the total commute to about two. It would be naïve to assume no security measures would be put in place for trains, though they have fewer security concerns. With only theoretical commute time information available for rail, the time factor appears fairly equal.

Though time is not an issue, money certainly is. This project aims to be completely privately funded, and if all goes as planned, the net effect would lower the price of this commute by 20 percent, according to Texas Central Railway President Robert Eckels. But, as seen with high-speed rail around the globe, this model is not profitable with the rapidly growing industry of discount airlines.

France’s government-owned Trains à Grande Vitesse is struggling to remain solvent with the introduction of airlines like easyJet, Ryanair and Vueling. While these planes don’t offer capacity for 400, they offer prices starting around $35 that would bankrupt a private enterprise rail. It is only a matter of time before these airlines and their ilk spread to the U.S. and render this project futile.

Addressing the monetary consideration, an audience member at the panel questioned Eckels about how much the project would cost and how much has already been secured in private funding, a question he easily dodged throwing out the very precise figure of “billions.” The inability to secure funds in a timely manner is what caused the high-speed rail project to fail 20 years ago. By dodging this question, Eckels was unconvincing that this project would not meet the same fate.

Rail transportation is not a traditionally profitable industry. That’s why it is commonly — almost uniformly — taken up as a government project. In typical American style, the Texas high-speed rail proponents champion the free market and want to apply the private model to this industry. But making this endeavor financially successful will take a feat of unparalleled innovation. Instead of spending this significant amount of funds and innovative effort on a project that would have to defy all odds to succeed, these same private investors should invest in creating American-based discount airlines as a preemptive measure for the inevitable arrival of their European counterparts.