The impact of the Covid-19 pandemic on the management of private railway companies in Japan: Profitability and business model analyses

Document Type

Journal Article

Publication Date

2024

Subject Area

place - asia, mode - rail, organisation - management, economics - profitability, economics - revenue, economics - subsidy, ridership - demand, ridership - forecasting

Keywords

Covid-19, travel demand, management strategies, Japanese railway

Abstract

The prolonged Covid-19 pandemic and resultant sporadic lockdowns have led to a decline in demand for travel, causing the number of railway passengers to decline. In Japan, the railways are run by private operators, whose businesses and earnings have been severely affected. In this study, based on Japanese listed railway companies’ investor relations information, we analyze how the Covid-19 pandemic influenced a decline in their revenues and changes in their profit structures. In addition, we conducted a text analysis of the differences in management strategies between loss-making and profitable companies and explored the management strategies that characterize profitable companies. The results suggest that to achieve a profit structure that remains sustainable post-pandemic, private railway companies need to strengthen the non-transportation business segment because it generates enough revenues to compensate for the loss-making segments. Further, they should review their management strategy from the perspective of the corporate brand, organization, finance, and business segments beyond existing ideas. The theoretical contribution of this study proposes that managers of railway operators or public sector policymakers can assess the impact of a severe impact on the demand for railway services, such as the Covid-19 pandemic. And it enables quantitative analysis, such as examining business portfolios to avoid risk and estimating future railway passenger forecasts. The results of this study provide suggestions for management strategies for corporate groups centered on railways to sustain and develop stable railway operations in the event of a significant decline in demand for railways such as a pandemic, disaster, dispute, and so on. And it can be used for subsidies and other support from the public sector to railway operators as well as private railway companies, and for policy making.

Rights

Permission to publish the abstract has been given by Elsevier, copyright remains with them.

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http://www.sciencedirect.com/science/journal/0967070X

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