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In no particular order:

1) Fuel tax. There's no tax on jet fuel, but rail companies pay tax on their diesel or electricity

2) Inflexible service, but high expectations. The European rail timetable is changed twice a year, and those trains will run (in normal circumstances). There will be a train from X→Y every hour from 5am until midnight, and those trains run even if very few people use them on a particular day. An airline can change the schedules more easily, and cancel/rebook passengers at fairly short notice.

3) Rail infrastructure is subsidized differently to aircraft infrastructure. I don't know enough to compare which benefits the most. Externalities aren't costed properly (e.g. noise and pollution).

4) Railways must still provide low-profit-(even loss)-making services, they may be expected to do this using profits from other routes. For example, long distance intercity trains might be subsidizing rural services.



Railways also have the externality of stopping all traffic.

More of an issue for lumbering freight trains than passenger trains though.




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