Beijing-Shanghai Bullet Train Gets $5b Revenue

High speed rail service between Beijing and Shanghai made $ 5 billion revenue on ticket sales last year, belying reports that the bullet trains in China are running in losses.

About 30 billion yuan (USD 5 billion) of tickets were sold last year in the 1,318 km route, Cai Qinghua, former chairman of the Beijing-Shanghai High-speed Railway Company Ltd told Xinhua news agency.

The line may rake in some 1.2 billion yuan in profits this year, following continual losses since its opening in June 2011, he said.

“We originally planned to achieve a financial balance in five years and recoup our investment in another 14,” said Cai.

The financial situation of other major railways in China remains obscure, but it is widely acknowledged that making profits from pure passenger traffic is difficult for high-speed rail operators.

The China Rail Corporation (CRC) manages the world’s largest high-speed rail network and lost 5.4 billion yuan in the first half of 2014. The company has 3.4 trillion yuan of liabilities.

The Beijing-Shanghai profits should ease the predicament of the CRC, which runs the transport business along the route.

A high-speed link between the political center of Beijing and the financial hub of Shanghai was first proposed in 1990 but it was another 18 years before the project finally broke ground, around the same as the first high-speed railway (Beijing-Tianjin) opened for business.

“Construction and management of high-speed systems was standardised during the work on the Beijing-Shanghai route, when Chinese rail technology caught up with the rest of the world,” said Cai.

“Behind the financial improvements are rapidly increasing passenger numbers,” said Sun Zhang of Tongji University, but that’s not how it has always been.

An accident that killed 40 people in 2011 brought a huge amount of unwelcome international media attention to the project and greatly dampened the enthusiasm of the travelling public.

A spate of fanciful and fantastic online rumors spread spurious nonsense that daunted some potential travellers.

Passengers have ultimately been won over by the comfort, convenience and relatively low prices that high-speed trains offer.

More than 100 million trips were made on the Beijing- Shanghai line last year, up 27 per cent, about an eighth of all bullet train trips in China.

Average daily trips on the route rose to some 290,000 last year from 132,000 in 2011.