When people say "I want to see some rail-on-rail competition", that usually translates as "I just want a cheaper fare".
Yep - which is possible, with the right infrastructure.
Yes and that is what is needed to encourage more people to take the train.
It's exactly what happened with the airlines, while the routes were controlled by a few former flag carriers, with limited competition, high operating costs and high ticket prices travelling by air remained something of a luxury, it was only the entry of the budget airlines with a firmer focus on efficiency, much lower operating costs, and significantly lower ticket prices which transformer air travel.
The railway needs this same kind of transformational change, shake-up the industry, its operators and its practices if it's ever going to achieve the kind of passenger growth many people hope to see.
Right, so market forces are an interesting one...
Yes, budget airlines did make savings, but how did they achieve this?
-Utilising quieter, secondary airports if possible.
-Using staff to carry out multiple jobs (a.k.a check in and boarding)
-Flying multiple aircraft in to a given airport at the same time, to reduce the hours they need to run airline-specific facilities.
-High seat occupancy rates and flexible fares to maximize revenue per seat. This also comes in line with not flying as much of a frequent service as perhaps flag carriers would, because this increases the probability of carrying "fresh air".
So, how do we carry these savings out on the railways?
-Quieter, less used routes might be a possibility, but this would easily be negated by the fact that stations in cities are already overcapacity and a longer journey time would result in extra crew costs and a requirement for more trains.
-Reducing staff - railways already don't require "check in" or "boarding" processes. Most of the staff left are pretty much operationally nessacery or needed to guide passengers through larger stations (especially disabled ones).
-High occupancy rates - TOCs need to run a consistent service throughout the day, not only to serve non-peak journeys, but also to make sure trains are in the right place come the evening rush or following day. Also worth noting these off peak services are where the cheap fares are!
To be honest, I don't know how relevant the comparison to airlines is. Airlines are in many ways an operationally expensive, but fairly cheap on capital. Airports and planes are expensive, but there is little fixed infrastructure in-between those destinations besides the odd radio beacon.
Railways on the other hand are expensive in capital, but cheap operationally. Electric railways have pretty low energy costs and staffing costs can pretty much remain static with longer trains.
Unless an operator could build significant infrastructure, there is little they could do in terms of improving efficiency. Regardless, fares are high because of constrained capacity. Treasury makes a killing on repayments from IC operators!
Arguments over construction aside, HS2 will be a very operationally efficient railway when it opens with plenty of capacity. Each train will serve more journeys per day, with less upwards pressure on fares from demand outstripping supply.