Air India, which offers discounts on all 21 Rajdhani routes and sells last-minute tickets at throwaway prices, seems to have spotted a big opportunity.
Will airlines take away a substantial chunk of commuters on major train routes after Indian Railways move to hike Rajdhani//Duronto/Shatabdi fares over 40% under 'surge' pricing?
Air India, which offers discounts on all 21 Rajdhani routes and sells last-minute tickets at throwaway prices, seems to have spotted a big opportunity.
"We will not be changing fares of our Rajdhani scheme. It will continue the way it was earlier despite Railways introducing the surge pricing," said Ashwani Lohani, chairman and managing director, Air India.
With this, travel with the national carrier will be cheaper than air-conditioned rail travel on these routes.
At present, a Mumbai-Delhi Rajdhani second class AC ticket costs around Rs 2,870. With the introduction of flexi fares it may go up to Rs 4,054.
Air India had introduced a Rajdhani scheme about couple of months back, under which it offers fares comparable to 2A of the train, provided it is booked within four hours of flight departure. While Air India's move of unsold inventory at a throwaway price has been criticised by executives of rival airlines, it has increased the AI's revenues on the traffic generating routes.
According to the airline officials, since the start of the scheme about couple of months back , Air India has been selling around 450-500 seats daily on these routes. AI officials acknowledged there has been volume growth in these sectors, but did not provide growth details.
The Union Ministry of Railways has announced the flexi fare system for Rajdhani/Duronto and Shatabdi trains from Friday. No changes have been made for 1AC and EC class of travel. Under it, with every 10% of berths sold, there will be a 10% increase in base fares subject to ceiling of 1.5 times. The cap on surge pricing on 3AC is 1.4 times. A back-of-the-envelope calculation shows that while fares on Rajdhani/Duronto will increase 40-43%, for Shatabdi it is set to increase around 30-33%.
"This will definitely make flying more attractive for passengers. Also, it will help the business community who can return the same day if they travel by air instead of train" said Iqbal Mulla, chairman of consultancy group Global Tourism Council.
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