High-speed rail vs. low-cost air : competing or complementary modes?

At the 2nd Florence Intermodal Forum policy makers, regulators, associations and operators of both the rail and the air transport sector came together to discuss current issues that impact both sectors alike. The central question was whether high-speed rail and low-cost air were competing or complementing modes of transport. After the liberalization of the European air market low-cost air carriers had taken over many medium length routes in Europe. High-speed rail could win back a lot of ground on many routes and remains dominant especially on city connection as illustrated by the Rome-Milan corridor example. The development is taking place against the background of an ongoing liberalization process in the rail market which has an important effect on innovation in the sector. Are the two modes serving different markets or are they in competition with each other? To what extent can they be complementary? What role does state aid play for each sector and how can policy work to address passenger needs?