Until last year passenger miles on the bullet train network were growing, but everything has now changed
Japan’s first Shinkansen, or bullet train, began running just before the 1964 Tokyo Olympics. The high-speed rail system remains as much a status symbol now as it was then. Yet the trains, which cover 22 major cities, are all nearly empty.
East Japan Railway (East JR) and West Japan Railway (West JR) — the two largest services — are expecting their biggest losses since they were privatised in 1987. East JR forecasts a loss of Y418bn ($4bn) for the year through to March. West JR a loss of Y240bn.
Before the pandemic, profits from bullet trains offset unprofitable rural and regional lines. The shinkansen network is crucial for Japanese commuters who work in large cities such as Tokyo and Osaka. That traffic is the railway companies’ main source of stable income. Until last year, passenger miles were growing.
Everything has now changed. Tourist numbers plunged 99 per cent in September compared with the previous year. Remote working led to a three-quarters decline in East JR’s bullet train passenger numbers in August. Those who need to travel opt for cars or company buses instead of trains.
For the railway companies, finding alternative sources of stable capital will be difficult. Unlike airlines, which can open new routes, fixed rail infrastructure puts them at a disadvantage.