Despite receiving flak from commuters and a section of analysts, Indian Railways on Sunday said surge pricing, announced recently for some premium trains, won’t be rolled back, but added that the scheme won’t be extended to other trains for the time being.
Quoting recent data, which showed non-suburban sector has shown positive growth, the rail ministry also sought to refute the perception that the new flexi fare scheme will prompt 2AC and 3AC passengers to migrate to low-cost airlines.
Justifying the new scheme, Mohd Jamshed, member-traffic, Railway Board, said: “Currently, all our Rajdhani trains are over-booked, more than 118 per cent of seats are booked as compared to 90 per cent in the corresponding period last year.”
He added that the rush hasn’t receded a bit after the new scheme was launched, even as the transporter could garner an additional Rs 1.6 crore in the first two days of the scheme. “We will also be coming out with loyalty points and frequent traveller schemes similar to the aviation industry soon.”
According to the ministry data, the non-suburban segment, which carries 46 per cent of passengers and accounts for 94 per cent of passenger revenue, has witnessed a 3.2 per cent growth in the number of passengers during the first five months of this fiscal. The passenger segment as a whole grew just 0.34 per cent in the period.
To dis-aggregate the non-suburban data, IR clocked a 6.17 per cent growth in number of 1AC passengers, 1 per cent in 2AC, 5 per cent in 3AC and 6.39 per cent in the chair car segment in April-August period.
“If we take the premise that increase in rail fares will lead to passengers shifting to airlines, then decrease in airfares should also lead to passengers shifting from railways to airlines. But the ground situation doesn’t support any such shift in traffic. Despite airfares this fiscal having been at their lowest, we have experienced our ridership in the non-suburban segment growing, a senior railway official said.
In terms of revenue, the non-suburban segment witnessed a growth of 5.3 per cent in the April-August period, against an overall growth of 4 per cent in passenger receipts.
According to Yatra.com, a Delhi-based travel agency and search engine, due to the drop in crude oil prices globally, the Indian civil aviation sector has witnessed a 14 per cent drop in airfares since 2014. “As the rail fares move closer to airfares, there is bound to be a shift in the mode of transportation, but it will be limited to the trunk routes,” Sharat Dhall, president of Yatra.com, said.
The passenger segment is heavily cross-subsidised: to the tune of Rs 32,000 crore. Revenue from this segment is estimated to be Rs 52,000 crore for the current fiscal, up 12 per cent from the previous fiscal. Revenue from passenger segment is just over a quarter of railways’ gross traffic receipts.
According to the data available on the ministry of railway website, Rajdhani, Shatabdi and Duronto comprise 4.4 per cent of the total mail/express trains plying on the transporters network and carry less than 10 per cent of reserved passengers.