The Taipei-based product manager used to fly at least once a week to other parts of Taiwan.

But nowadays, he heads for the train station downtown and hops on a high-speed train just minutes before it whizzes off at a top speed of 315kmh.

Although plane fares are now more competitive, he is unlikely to revert to commuting by air.

'Somehow, I feel safer with my feet planted firmly on the ground,' he said.

A growing number of Taiwanese are switching from plane to train, dealing a major blow to the domestic airline industry, already hit by a steady drop in passengers in recent years.

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The island's four domestic airlines - Far Eastern Air Transport, TransAsia Airways, Mandarin Airlines and Uni Air - used to dominate the corporate travel market serving businessmen shuttling between Taiwanese cities.

There was little competition since the alternative modes of transport - the low-cost conventional rail and highway coach - catered mainly to other groups, such as tourists and students.

But the airlines' share of the domestic travel pie has shrunk significantly, barely a year after the high-speed rail service was inaugurated in January.

Some 6.72 million passengers travelled on Taiwan's domestic airlines in the first half of the year - a sharp plunge of 22 per cent compared to the same period last year, according to the Ministry of Transportation and Communications.

Airlines were forced to cut back on their flights by 13.7 per cent in the first half of the year.

And they recently waged a price war - some slashing fares by 50 per cent - despite global fuel prices hitting record highs.

TransAsia Airways, for instance, halved its Taipei-Kaohsiung fare to NT$1,090 (S$49) - about NT$400 cheaper than the high-speed rail fare. It has since seen a significant rebound in passenger numbers.

But some industry players concede that such a strategy is not sustainable in the long run.

'It is extremely difficult for airlines to compete with high-speed rail for routes within 500km. And all of Taiwan's domestic flights fall within this range,' said Mr Hanson Chang, senior public relations manager of Far Eastern Air Transport.

The airlines could face an even more turbulent ride when the high-speed rail is operating at full capacity by next year.

Japan's Tokyo-Osaka bullet train services provide a good example, said Professor Mike Chang, who heads the department of airline management at Kaohsiung Hospitality College.

'The bullet train has given airlines...a serious run for their money,' he added.

But observers say Taiwan's airlines were in trouble even before the advent of high-speed rail.

'Passenger numbers had already taken a dip with the hollowing-out of Taiwan's manufacturing economy. Instead of flying to southern Taiwan to survey their factories, businessmen now travel to the mainland,' said Mr Hanson Chang.

Prof Chang told The Straits Times: 'The high-speed rail project was approved during the economic boom in the 1990s. No one had predicted that the economy would take such a downturn.'

These trends may make mergers between airlines inevitable in the long term, say analysts.

Meanwhile, some airlines are exploring other alternatives. One is to expand short-haul services to destinations such as South Korea's Jeju Island, where passengers can catch connecting flights to China.

Said Mr Hanson Chang: 'We may not be a match for the high-speed rail in Taiwan. But we can explore the skies beyond the island.'

hwee@sph.com.sg