Financial Analysis of the Impact of the Transport Capacity on the Profitability of the Railway Business in Bangkok

Abstract

This study analyzes the impact of the transport capacity in operation, one of the indicators of railway service level, on the demand and the profitability of the railway business in Bangkok, setting two different management scenarios. The results showed that as transport capacity increased, demand on the route also increased, improving the profitability of the operator. Under the state-owned method, the initial deficit was eliminated. In the net-cost and up-and-down separation methods, a 20% increase in transport capacity resulted in a 30-year shorter break-even point, a 40-year shorter multi-year turnaround year and up to approximately 1.5 times higher single-year revenues. Therefore, it was concluded that increased transport capacity would not only be more convenient for users but would also generate more revenue for operators than the costs involved.