Air France-KLM and Veolia have announced the start of a new joint business concept: the offering of TGV-style high speed rail services under the Air France brand and livery from 2010 onwards. This move by Air France to introduce an airline operated railway service might represent an effort to recover the significant share of travelers European airlines have lost to competing high speed rail services. The business logic behind airlines offering their own high speed rail services is to compete with high speed rail services and regain the lost customers. The competition between airline rail services and incumbent rail operators is expected to be intense, with airlines needing to offer competitive prices and better services to attract customers. Airlines need to set up a feasible business model for HSR operations, which includes investing in infrastructure, technology, and staff training. Rail operators can answer this challenge by improving their services and infrastructure, and by collaborating with airlines to offer seamless travel experiences. The European high speed rail network has grown significantly in the past two decades, and this trend is expected to continue. Airline rail services will need to compete with the existing high speed rail services, which have gained significant customer recognition and demand.
