AC train travel soars; air traffic shrinks

Air-conditioned rail travel is more popular than ever, with the numbers soaring this fiscal, even as airlines entered their eighth month of declining growth in December 2012.

This is largely due to the widening gap between AC train fares and airfares, as airlines increasingly move away from the low-cost concept.

For April-December 2012, the number of domestic air passengers fell by six per cent. Meanwhile, train bookings for all air-conditioned (AC) segments showed a positive growth trend during the period — 9 per cent for AC first-class, 5.82 per cent for 2{+n}{+d}AC, 11.85 per cent for AC 3-tier, 14 per cent for chair car and a whopping 60 per cent for executive chair-car. Rail travel growth is, however, likely to be marginally inflated as the Railways have allowed bookings 120 days in advance from mid-March 2012. For the period before that, bookings were allowed 90 days ahead.

In early 2012, both low-cost and full service airlines decided not to charge fares that did not recover the operating cost of the flights. The grounding of Kingfisher Airlines added to the misery of fliers, as the airline was targeting a higher market share by dropping fares.

Meanwhile, the Railways booked more AC passengers despite fare increases in 2012. Travel in 1{+s}{+t} and 2{+n}{+d} AC classes became costlier in April 2012, followed by another round of hikes for all AC travel from October due to higher service tax.

The growth trend in AC train travel is unlikely to reverse, even after Tuesday, when another round of fare hikes take effect.

“The increase in rail ticket prices will not have any impact on air travel, as the hike is marginal and the fare difference between an AC First Class and the cheapest economy ticket is more than 40 per cent,” John Nair, Vice-President, Business Travel, Cox & Kings, said.

A recent study by market research firm market-Xcel Data Matrix, of over 12,000 rail passengers, shows that 41 per cent were willing to pay 5-10 per cent higher charges, 19 per cent were ready to shell out 10-25 per cent higher fares, another 10 per cent were fine with paying 25-50 per cent more.

Vinay Mittal, Railway Board Chairman, maintained that airfares were too high and dynamic to impact rail fares. K.K. Srivastava, Railways’ Member Traffic, said the airlines had dropped fares on limited routes and offered far fewer seats to impact the Railways AC segment.

Mamuni.das@thehindu.co.in
Ashwini.phadnis@thehindu.co.in

http://www.thehindubusinessline.com/industry-and-economy/ac-train-travel-soars-air-traffic-shrinks/article4329548.ece

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