Trains overtaking domestic airplanes on short routes

Consider this: A typical Delhi-Mumbai trip on a no-frills airline which cost just Rs 2,900 last May is now priced at around Rs 4,000-4,400 per ticket. For full service carriers, the charge ranges between Rs 5,000-8,800 per person. On the other hand, the cost of an AC 2 ticket on the Mumbai-Delhi Rajdhani has remained almost constant at Rs 1,975. On non-Rajdhani trains, AC 1 fares cost Rs 2,600, AC 2 fares come at Rs 1,550 and AC3 fares are priced just over Rs 1,100, which is 400 per cent cheaper than current airfares. A ticket on the Garib Rath costs just Rs 600.

The aviation industry has already begun to notice the impact of steep airfares that are driving away passengers. In the Jan-March quarter of 2008, the industry notched up a growth rate of just 11-12 per cent over the year-ago period — the lowest quarterly growth posted in the last four years. In April, the going got even worse, with the sector showing single-digit growth of just over eight per cent. Airports like Chennai, which registered a growth in passenger handling of over 33 per cent in January last year, grew at a meager four per cent this year.

A major factor for the slump in growth figures is the high airfare on short-haul routes (distance of less than 750 km) where the gap between the cost of air and rail travel has become even more glaring. A SpiceJet flight from Delhi to Jammu costs approximately Rs 4,000-4,500 per person. But the 590-kilometer distance, when traveled by train, costs just over Rs 900. Similarly, a Cochi-Coimbatore flight priced at Rs 6,000 per person would cost just Rs 450 by train.

Analysts say that the biggest impact of migration from air to rail would be felt by airlines operating on short haul routes. “Short haul routes are comparatively expensive than long-haul flights. As a result, both business and leisure travelers who were flying short haul are now switching to rail travel since the time-loss factor is not very high,” says Kuljit Singh, partner (transaction advisory services) Ernst & Young.

While airlines bleed and are likely to post cumulative losses of Rs 8,000 crore this year, Indian Railways is chugging along comfortably. For the first two months of the current financial year, the railways carried 115.53 crore passengers, a growth of over five percent compared to the same time last year. In April-May last year too, it had reported a similar growth rate.