Consumer delight as Railways takes battle to skies

The Railways Minister has reduced AC first class fares by 18 per cent, AC second class fares by 10 per cent and has started special fully air-conditioned ‘Garib Rath’ where fares would be 25 per cent lower than present AC-III tier fares.

‘‘Our aim is to increase the flying base in the country. We will try to consistently offer tickets which are cheaper than rail fares. In the coming few days you will see us reducing our airfares further,” GoAir managing director Jeh Wadia said.

A Delhi-Mumbai AC first class train ticket will now cost Rs 3,391 as against the earlier Rs 4,135 and AC second class will now cost Rs 1,999 as against Rs 2,221. On the other hand, a seat on a low-cost air-carrier will cost only Rs 1,379 (plus tax) in the lowest slab. Fares on low-cost carriers rise by Rs 200-300 when each slab gets filled.

New Delhi-based SpiceJet is also considering matching the railway fares. “We are adopting a wait-and-watch policy. We could consider matching these prices offered by the Indian Railways,” SpiceJet chairman Siddhant Sharma said.

However, many players feel that the reduction in railway fare is not going to have any impact on the aviation sector. “The size of the airline market is growing. Even if the railways reduces fares, it will only benefit travellers who will graduate from one class to another. But I don’t think that there would be a reverse flow of passengers from airlines to railways,” a senior Indian official said.

Industry watchers feel that the aviation industry would be in trouble only if the government touched the AC III tier rates or increases capacity on the AC segment.

“The problem with the present railway structure is that there is no adequate capacity in the AC segment. At any given time, the waiting list on any train operating on major routes is around 150-200. In this regard airlines are a better mode for travel.,” an analyst said.

Air Deccan’s Capt Gopinath also feels that the reduction in ticket rates is not going to have a significant impact on the aviation sector. “Airline ticket prices are dynamic and we always come out with innovative schemes while the tariff on railways is static. Railways cannot compete with us on the time that we save for a traveller,” he said.