Last week yielded a head scratcher about the KTX (Korea’s bullet train):
In December, rail passengers can look forward to viewing the latest movies while riding the country’s bullet trains, the KTX. The “cinema train” project entails turning the first car of the train into a theater….The railroad believes movies-on-the-go will be attractive to long-distance passengers traveling more than two hours on the bullet train, at speeds of up to 300 km/h. Rail officials predict the new service will attract 2.5 million passengers a year.
OK let’s work the numbers. KORAIL says the plan will attract 2.5 million a year (let’s set aside if that will actually happen for the moment), this works out to 6,850 people per day. To do this they will need to donate a car in the train, or about 60 seats. Now let’s count KTX trains, to do this let’s count the number of trains between two segments both ways, Seoul to Daejeon and Yongsan to Seodaejeon (this assumes that all KTXs at least stop at Seoul area to Daejeon area, and perhaps continue elsewhere). This equals to 138 KTX trips a day. This also equals to a loss of 8,280 seats a day as per the movie theater plan.
So we have the first problem, this will give up more possible revenue seats than it will possibly gain. Or to put the problem into starker relief, this plan calls for the use of 15,230 seats a day (the 8,280 for the theater plus the 6850 additional seats sold) that are not currently being sold!
Or if you want to take a look at capacity, thats 60 seats a car, 18 cars a train, 138 trips, making 149,040 seats. Which means this plan will hopefully call for the use of 10% of capacity unsold on a basis so regularly that they can be assured of both the space needed for the theater and the additional riders.
Now lets look past what this probably means for KORAIL’s real ridership, and talk about this conceptually. One of the main benefits of the KTX is the shorter travel time, or about half that of the other classes. This leads to travel times currently of about three hours to Pusan and four to Kwangju/Mokpo. The problem is your average movie is about two hours or longer, so only a few people will see the entire movie. Secondly since these are first-run, or very recent, movies I am willing to wager that few people will be willing to walk in and sit on a movie already half way through.
What does all that mean? The number of people an innovation like this would attract would be very narrow. They would have to be people who:
A. Need to travel at least two hours on KTX line
B. Start from at least Seoul, Pusan, or Mokpo/Gwangju
C. Willing to pay 50-100% more over slower classes of service (or even more in the case of the bus)
or
A. A free movie is enough to lure people from Air travel which they take out of time efficency or preference over rail transit.
Now given that airlines have reduced Seoul-Pusan service since the KTX’s introduction, you could say that those remaining loyal to the airlines need some pretty strong inducements. I wonder if a movie is enough.
As for the former, the price of the cheap train Seoul to Pusan is about W25,000. Which means that movie costs about W20,000, compare this with a 5-10,000 won movie ticket (or hell, the 3 for W10,000 first-run fake DVDs you can buy outside the station where you can even have your choice of movies. Thats 6+ hours of entertainment enough to fill the train time).
Regardless, it is from these two groups that KORAIL hopes to attract 6,850 per day (on average) from.
In defense, if we are generous and say that KORAIL is running at 75% KTX capacity currently on average, this leads to sales increase of about 6%. Ambitious but attainable. (Then again if real capacity is less…)
21 Comments
Not great at math but it seems you got the numbers about right. Also factor in that “the latest movies” probably aren’t going to be less than six months old unless KTX pays up for first-run movies, which would really dent profits. So its movies everyone has already seen.
Some decent food in first class would be a better draw I’d suspect.
“A free movie is enough to lure people from Air travel which they take out of time efficency or preference over rail transit”
Time efficiency? Not if you’re going from downtown Seoul to downtown Busan, I should think! Add in the traffic to/from Gimpo and Gimhae Airports, lead time checking in, etc., and I’d wager it’s not an attractive proposition. It might only be marginally faster than taking the train, and less comfortable and more of a hassle.
Although I do see the point you’re making on the economics of it all….
(This is all speculation on my part. I’ve suffered in airport traffic and flown between Seoul and Daegu, but actually most of my cross-country travelling has been by the lowly, high-speed (on a good day) bus. I’m not a KTX apologist—never taken it, in fact—but reduced service by the airlines since opening of the KTX should indicate something….)
When I say Time efficeny, you forget that not everyone is interested in traveling between downtown Seoul and downtown Pusan. For example the 4+ hours to Gwangju may be more than the flight. Also what if you need to travel a place not a KTX line, but close? Say Ulsan or Yosu?
Valid point though when we are talking about downtown to downtown.
I know a few command sponsored personnel who take Korean Airways on TDY just because of the stewardesses.
“So what’s your point, Mark?”
Well, you must know your market. KTX could do the following which would establish their monopoly:
1. Seat seniors aged 50+ in cars with karaoke machines and let them dance in the aisles.
2. Seat businessmen aged 30-50 in cars with masseuses dressed in schoolgirl outfits.
3. Seat mixed parties in cars with new movies on DVD bought from that dude outside gate #20.
4. Seat women traveling alone in cars with their choice of KBS drama, MBC drama, SBS drama, or the latest plastic surgery and cosmetics documentaries.
Whaddya think, George?
I always use KTX instead of regular rail service only because KTX really does not allow smoking on the train. This is the *only* reason I use it. If this should change, then I would drop them like a hot potato.
If they incorporate #2 from Mark’s suggestion you can vote me in as a KTX passenger :):):)
Exactly. When I lived in Seoul, I spent a lot of time in various means of transportation for my numerous biz trips inside Korea, and I flew to Pusan [after April 1, 2004] only because it meant a lot of mileage for a cheap amount – upgrade to biz class is only 10,000 won… You fly comfortably and get twice the amount of mileage you’d get in coach. Flying to Kwangju and other remote areas like P’ohang or Cheju was still a good proposition, of course. But for Taejŏn KTX really shone. We stopped driving there as soon as the KTX opened – we would even take the Saemaŭl sometimes before – as 55 minutes is something you couldn’t dream of in a car, esp on the way back…
Like Drambuie Man, I think the intentions of KORAIL are wishful thinking: either the project hasn’t gone through a serious analysis – or if it did, they fired the analyst afterwards… After all, if it was something that could work, I’d have expected to see it by now in France – the TGV is 25 years old this year, and we have quite a little more volume than the KTX. In terms of entertainment, TGV stations and trains offer the rental of DVD players and discs – a good way to spend Marseille-Paris in a train, 850 km in under 3 hours [do the math, the average speed is impressive :-)]. And also a good way to augment your collection of videos if you have a portable computer and the right tools… sssssh!
Dram_man: I agree that if someone is travelling off the mainline, air may be a better option.
Mark: Have you considered a job in marketing?
dda: Maybe they should emulate KAL, which now has personal TV/movie/CD viewers/players, on at least some overseas flights…even lowly coach passengers like me can choose what to watch or listen to, and when. I wonder if the capital outlay would be comparable to retrofitting carriages for movie showings? (Would probably cost more, actually….)
At the beginning, KORAIL overbought KTX trains in a bid to provide seats to all customers during peaks periods, such as the upcoming Chuseok holiday. They did this out of a sense of obligation to the public, but as a result KTX usually operates at significantly below capasity during much of the year. And, they still have to book the depreciation on their fleet of ultra-fast trains. It ain’t pretty.
Whoops.
Sewing,
Why yes, in fact…thanks to my marketing skills, I’ve been hand selected by my Uncle Sam to go sell Judeo-Christian morals and democratic principles to the Muslims next year.
Sewing: KAL on international routes and on domestic routes is two complete different beasts, really – and I suppose it is the same for most countries… On domestic routes, KAL [and Asiana] planes are dignified cattle wagons, with wings. The
babesattendants are still cute – but harried and mostly unsmiling – and service is minimal. But for an average time flight of 45 mn, what do you expect anyway…? Leg room is certainly not something you should expect. The seats are crammed much tighter than on international routes – and these are the same 747, 737 and the like. I once had to fly to Pusan sitting on a window seat next to an athlete of some sorts, and he had grasshopper legs. Fourty-five minutes can be indeed long…The only real service airlines in Korea offer on domestic routes is speed, on most routes – try to get fast to Ulsan or Yŏsu
And I came to appreciate Kimp’o’s relative closeness to downtown. I used to grouse in the 90s how far away Kimp’o was… Never again! Kimhae is far and traffic is bad. Other regional airports, on the other hand, are close by, comparatively – or at least reached fast enough.
One big problem with flying inside Korea for a day trip is fog. Every year, in fall and early winter, fog throws a monkey wrench in Kimp’o’s well-oiled cogs. I have seen many times flights delayed or cancelled because of fog during this period. Being stranded in Kimp’o at 9am with a 12pm appointment is a real bummer…
R.Elgin….all of the rail services (Blue and Orange trains) are now no-smoking. I often take the blue rail between Daegu and Kumi and there hasn’t been any smoking allowed on these trains for over a year. Just an FYI.
What I really wish KTX would do is start their trains an hour earllier. For those of us in Daegu who have an early flight out of Incheon, we have to take an 0400 bus to the airport because the first KTX doesn’t arrive in Seoul early enough. It’s a major hassle.
If this country truly wants to label itself as a travel hub, the first thing they should do is synchronize their rail system with their flight schedules. That to me would be much more beneficial than having the ability to watch “Herbie Fully Loaded”. Until they do that, or expand the domestic flight schedules, the transportation infrastructure here is still second rate.
Maekchu> Sure they are all non-smoking, unless you count the bathroom on ALL THE TRAINS.
PS Whats wrong with “Herbie Fully Loaded”. Thats the one Lindsay Lohan shows her tits in right?
“Maekchu wrote:
Until they do that, or expand the domestic flight schedules, the transportation infrastructure here is still second rate.”
As opposed to the states wherein you would need a car just to buy cigarettes?
One thing that must be understood about domestic air travel; unless the aircraft is full and it is a smaller prop-job, the carrier looses money. The government forces KAL and Asiana to fly to these destinations at a loss.
They’re building a rail line to the airport; once that’s completed, I wonder of KORAIL will augment service to facilitate connections to the new line?
I’ve taken the bus from Daegu to Incheon. It’s a heck of a lot longer than just going to Seoul. The first time, it was okay…the driver wound up on Route 15 (to the far west) and avoided most of the Gyeonggi-do bottleneck. Last time, on a rainy Saturday afternoon, the driver took Route 1 right through the Seoul toll plaza and all the way to 100. It felt like the longest bus ride of my life, and I’ve gone across Canada by bus!
Going from East Seoul to Daegu by bus, the new Route 45 (?) that wraps around Mungyeong Saejae is fast and unstressful. That’s until everyone with any business in Yeongnam discovers it.
I think that comment was meant mainly to be in reply to Maekchu….
railwaycharm (who might honor us by explaining his nickname on this thread
) is right - Korea’s air carriers lose money on domestic air travel. In fact, the majority completion of KTX allowed them to lobby successfully for a reduction of domestic service provision. I doubt they’ll be going back.
TGV trains can’t – unless the tech has changed in recent years, and KTX is basically a generation 2 TGV, 10+ years old – ride full speed at night. I dunno what’s the earliest train like, but there has to be some visibility. Of course, it only matters really for Taejŏn-Seoul, since the rest of the line is not high-speed yet.
As for prices on KAL/Asiana on domestic lines, it’s a mystery. The most expensive destination is the most frequented one – Cheju, with Pusan a close second – while Yŏsu or Ulsan are cheap… In a normal economy, you’d expect the airlines to try and limit the damage on these routes.