Increase in rail fare to be a boon for aviation industry

Aviation industry insiders believe rail passengers will move towards airlines

The fare increase announcement by railways minister Dinesh Trivedi will, the aviation sector feels, trigger movement of passengers towards airlines.

“The low-cost carriers (LCCs) are targeting the rail passengers and we are seeing a lot of movement towards air even now. If air fares remain stable at this level, the movement of upper-class train passengers towards LCC will increase because of the increase,” said Sabina Chopra, chief executive officer, Yatra.com, an online portal.

Trivedi on Wednesday announced a margin al rise across the board. For mail and express second class ,the increase will be by three paise per km; for sleeper class by five paise per km; for AC Chair Car, AC 3 tier & First Class by only 10 paise per km; AC 2 Tier by only 15 paise per km; and AC I by only 30 paise per km.

With the increase in fares, the first class Rajdhani fare between Delhi and Mumbai has reached Rs 3,720 as compared to the airfare of Rs 4,156, if booked three months in advance (see chart).

However, others feel that air fares are also on an increasing trend and one cannot necessarily project the shift.

“For the last few years, around 10 per cent of our passengers leave trains to fly with us but the future remains uncertain as air fares continue to rise,” said an executive with a low-cost airline.

He, however, added that any increase in rail fare would help bring passengers to them because “railways have problems with punctuality and cleanliness, to name a few.”