Suresh Prabhu-led Indian Railways is not rolling back its flexi-fare scheme for Rajdhani, Duronto and Shatabdi trains, and has even claimed encouraging response in the first two days of the new scheme’s implementation. At a press conference held to dispel myths around the system, Railway Board Member (Traffic) Mohd Jamshed also said that Railways is not worried about the schemes introduced by Air India to compete with the Rajdhani fare structure. “After the introduction of this scheme, 50,000 tickets have been booked under flexi-fare on September 9 and 10,” he said, adding that Indian Railways expects to earn Rs 500 crore additional revenue from the scheme this year. Railways plans to invest this additional revenue to provide better passenger amenities.
Mohd Jamshed also rubbished the notion that the move is ‘anti-consumer’, stating that only a small percentage of people will be affected. “This is not surge pricing, which is about charging during the peak times, this is a flexible fare system. It is internationally followed. In Europe, rail fares are very flexible; they change on an hourly basis,” he said by way of explanation.
Most importantly, Indian Railways put out a series of charts, comparing the travel cost, short-distance and long-distance, via air and trains (see images).
“Earlier, Railways was compared with roadways. We are now being compared with aviation sector; that in itself is a big achievement for us. But, train fares are not expensive. Let us not look at one or two cases. Consider the average, and once you do that, air travel cost is on an average Rs 7,000, which is way higher than air travel,” Jamshed said.
On the Delhi-Mumbai sector, the Rajdhani fare is between Rs 2870 and Rs 4104 on II AC, while airfare is ranging between Rs 2813 and Rs 13,746 for September 12, the presentation compared.
The whole debate and comparison started after Air India took a dig at Rajdhani’s flexi-fare system in newspaper advertisements. Air India said that its spot fares are cheaper than the Rajdhani second-class AC fares. Spot fares start four hours before the flight departure time. This is the not the first time that Air India is trying to lure Rajdhani passengers. Actually, this spot fare scheme was introduced by the aviation giant in June-end this year. Back then also Air India had pitched that its fares are cheaper than that of Rajdhani.
However, experts agree with Indian Railways on aviation sector not being a major threat. Says Jaideep Ghosh, the Head of Transport and Leisure at KPMG, “The concept of flexi-pricing or surge pricing is an international practise. So is the practise of giving discounts on air fares a few hours before the departure of the flight. In my view, Indian Railways does not need to worry about schemes that Air India or for that matter any other airline would offer.” “The fact is that most of these schemes are only valid a few hours ahead of the flight departure, in which case there is a lot of uncertainty associated with whether the passenger will get a seat or not. Also, unlike airlines, Railways actually provides better connectivity. It is not just about the final destination, but the many stations that form a part of the journey. As of now aviation sector cannot compete with Railways in terms of connectivity alone,” Ghosh told FE Online.
Professor G. Raghuram at IIM-Ahmedabad, who is a renowned infrastructure and transport expert says, “I think Indian Railways will see only a marginal impact from the low-aviation fares or the schemes that Air India is offering. I don’t see any major impact.” “There are a lot of people who prefer to travel by train and those who would choose an overnight relaxed way of travel that the train journey offers,” he told FE Online.