Potential Profitability of a European High-Speed Rail Network

Abstract

Despite being a long-standing European ambition and an important step to achieving climate goals, there is still no European High-Speed Rail (HSR) network. To gain insights into a profitable network design, this study develops a new formulation for the “Transport Network Design & Frequency Setting Problem” (TNDFSP), as current literature lacks one that can optimally solve the problem for instances of this size while also accounting for demand elasticity. The optimal solution is largely insensitive to fare changes and outperforms the current state-of-the-art in several aspects. Our model considers the 111 most populous European cities, along with all their origin-destination (OD) pairs, and finds the most profitable network design within a reasonable solution time frame. The results show HSR can be very profitable in Europe, but only when concentrated around a selected group of the largest cities in the western part of the continent.