Air Versus High Speed Rail


Air Versus High Speed Rail: 

How North Star believes the ‘world’s top strategic infrastructure project’ will revolutionise travel between Malaysia and Singapore, creating huge economic benefit

A new high-speed rail development is planned to connect Kuala Lumpur with Singapore by 2026, revolutionising travel and enhancing trade, interconnectivity and economic ties between the two cities. 

The rail link is due to begin construction in 2018 and results from strong political will on the side of both the Malaysian and Singaporean governments. This is evidenced by the signing of a bilateral agreement in December 2016 and the recent appointment of a Joint Development Partner (a Mott McDonald/Ernst & Young/WSP partnership) to provide technical consultancy and procurement advice to both government entities. 

Why the need for a new High-Speed Rail (HSR) Link? 

Singapore and Kuala Lumpur are fast becoming Asian megacities. Since 1980, Singapore’s population has doubled in size and KL’s has quadrupled. With the growth of these high-GDP cities continuing to explode, there is understandably strong desire on the part of both governments to boost interconnectivity, enhance infrastructure and drive economic growth for an estimated catchment of 20 million people who could potentially benefit.

At a glance: KL-Singapore High Speed Rail Project. ©North Star Consultancy, design template courtesy of Adioma.

Whilst current rail options between the two nations are limited, KL-Singapore is currently the world’s fourth busiest air route, proving that strong demand for travel between the two cities exists.


Trains Versus Planes: Why the planned High-Speed Rail Link between Kuala Lumpur and Singapore is destined for success

With the budget air market booming in Asia and many people flying regularly between the two cities, how can the project’s sponsors be sure that there will be sufficient ridership and revenue to compete effectively with the airlines and meet the current projections of a high EIRR (Economic Internal Rate of Return)?

North Star believes the following are key:

  • Detailed consideration given to the commercial and operating model of the rail system by both governments in the planning and feasibility stages to ensure the project’s long-term success; 

  • Evidence that points to high speed rail being a preferred mode of travel for customers in similar city centre to city centre scenarios (provided core customer needs are met);

  • Evidence that high speed rail links boosts the economies of all the regions it serves (as opposed to air travel which typically only benefits the beginning and end destinations of the service).

Commercial and Operating Model

Based on our experience, we know that an effective commercial and operating model is key to ensuring the successful formation and operation of a new railway. In this case, this is somewhat complicated by the fact that the demands of this project are complex. Indeed, there is a need to:

  • Finance and build civil assets and stations simultaneously in two countries;

  • Manage the supply and maintenance of all railway system assets including track, signalling, communications equipment, power and rolling stock; 

  • Appoint operators for all services (express, shuttle and domestic).

For this reason and perhaps wary of lessons learned from the failure of PPPs built for similar projects, MyHSR (the Malaysian HS government entity) and the Singapore Land and Transport Authority (LTA) gave careful consideration to developing a suitable model, resulting in the following:

  • Two publicly funded government entities (InfraCos), responsible for the development of stations and civil works in each of their respective territories and collection of track access charges and concession fees from the Operators.;

  • A privately funded AssetCo, responsible for the provision of all rail assets and funded by availability payments from the InfraCos and train lease fees from the Operators; and

  • Two operators, OpCo International and OpCo Domestic, who are responsible for operating the service and funded by all farebox and other commercial revenue.

North Star believes that the model (below) will form a critical foundation of the project’s long-term success, having been designed to satisfy the needs of all parties, guarantee the project’s longevity, drive a high economic rate of return and encourage modal shift away from the heavily congested air route.


Kuala Lumpur – Singapore HSR: Commercial and Operating Model. Source: Singapore Land Transport Authority (LTA).


2. Customers Prefer Rail: The Evidence

Based on North Star’s global experience of similar rail operations and understanding of customer needs within the air-rail sector, we know that customers generally prefer rail over flying where an option for the former exists and comparable (or even better) journey times are supported by an attractive customer experience. Evidence includes:

  • Eurostar (the world’s only other example of a cross-border high speed rail link), which enjoys an 80% market share over the London to Paris route;

  • Spanish high-speed Alta Velocidad Española (AVE) trains, which enjoy over 60% market share on the Madrid-Barcelona air route (formerly the busiest air route in Europe).

Other examples of cities that are connected by a strong, profitable and in-demand rail link include:

  • Tokyo-Osaka;

  • Frankfurt-Cologne;

  • London-Manchester;

  • Paris-Amsterdam

  • Paris-Brussels.

We have a high level of confidence that the KL-Singapore route will follow the model of these prestigious city centre to city centre rail journeys and enjoy a significant market share over air. However, this is dependent on the customer experience meeting the minimum hierarchy of needs for each core customer segment. As experts in designing service start-ups that cater to customer needs, North Star recommends that the KL-SG train service includes, as a minimum:

  • A clean and pleasant on-board and station environment;

  • Visible staff presence in stations and on board trains to provide customer assistance and information and reinforce a strong perception of safety and security;

  • An intelligent fare structure that not only encourages people to use the service, but also travel outside of peak hours, appealing to both business and leisure markets;

  • Smart station and rolling stock design that promotes accessibility and easy wayfinding;

  • Innovation in the provision of customer information and on-board entertainment.

3. High Speed Rail Drives Economic Benefit

Evidence also suggests that high speed rail links drive economic growth along the length of the entre rail route (and not just in the two end city destinations). Examples include:

  • The planned High Speed 2 rail project in the United Kingdom, which is designed to spread wealth from London to regions further north, creating jobs and infrastructure along the way;

  • Eurostar having significantly boosted the economy of Lille, a key stop along the London-Paris-Brussels route, both by increasing tourism and opening job opportunities in Paris to Lille residents.

This gives confidence that the new KL-SG service will give a similar ‘boost effect’ to the economies of Singapore and Malaysia. Finally, an added economic benefit will be that use of the rail service will free up the congested KL-SG air route, enabling higher runway capacity at both airports. This in turn is likely to promote faster and more efficient long-haul services, potentially drawing in higher levels of international tourist and business trade.


The proposed KL-SG rail link will drastically change the landscape of travel between Malaysia and Singapore and is one of the most significant railway projects to be announced in a generation. North Star is confident that the proposed rail link will provide strong competition for the existing short-haul air market and open opportunities for investment and boost economic activity along the entire southern corridor.

North Star Consultancy, established in 2007, provides specialist operations consultants within the transport industry. Backed by decades of collective experience, we provide our clients with operations expertise, ranging from strategic consultancy to hands-on delivery across areas including rail strategic advice, service start-up, proposal management, customer service strategies and more. We have delivered world-class transport solutions to a varied client base including operating companies, airports, airlines and other transport industry suppliers. Our clients are both within our original UK market and international, located across Europe, the Middle East, Asia, North America and Australia.


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