An air ticket can sometimes be cheaper than a rail ticket ! The erstwhile gap between rail and air fares is progressively being reduced.
In case of Rajdhani, only the first 10% of berths are at current prices. The rest 90% will be sold at prices starting at 10 per cent higher than the base fare and ending at 50% cent more for 2AC and 40% for 3AC. That is, the Rajdhani fare may become greater than the air fare! 1AC Rajdhani fare is already more than a normal air fare. This decision of Indian Railways to introduce dynamic pricing for select premium trains appears to be encouraging more and more people to resort to air travel. However, low-priced air tickets that are seen are normally meant for very few seats while most of the seats are generally sold at higher rates as the journey date comes closer. This is what dynamic pricing is all about.
Travel times between Delhi and Patna –
By Train –
Normal Travel – 12 hrs by Rajdhani, and 13.5 hrs by Sampoorn Kranti. (Present Fastest Trains) + 0.5 hr minimum waiting time.
By Air –
Normal travel – 1.3 hrs Reporting time – 2 hrs early
Clearly, 2AC rail and air fares are equivalent.
As part of reforms, despite an uproar over the move from the opposition, Indian Railways introduced dynamic pricing on premium trains.
Railways have later clarified that the model was introduced on an experimental basis and it will be reviewed after some time.
As per AirAsia India CEO Amar Abrol, “While air travel on some routes are cheaper than train ticket, people are unaware of it. However, the dynamic pricing of train tickets would definitely help low cost airlines to get more passengers.”
India’s aviation industry is currently witnessing a big fare war. When it comes to natural air fare war, it seems that the senior most Airline in the country, Air India, often has a leg up on new airlines. Air India does not want to lag behind. It intends to defeat all its rival airlines and attract passengers through lowest fares. The end user, the flier, has no complaints. The flier does not see anything wrong with AI’s increased publicity campaigns.
“It’s tough to fight in terms of market share as the private airlines are adding capacity at a frantic pace. As a government airline, we don’t have the luxury to do so,” says a top official of the Air India. Aiming to attract more fliers and achieve higher seat occupancy in its flights on trunk routes, National carrier Air India has decided that it will be providing “unbeatable metros fare” to domestic passengers willing to return the same day from July 25, 2016.
Air India is now realising that it needs to market itself and grab visibility. It is pulling out all the stops in its high-decibel promotional offers and advertising campaigns. As part of the pricing strategy, Air India will drop fares on four key routes, Delhi-Mumbai, Delhi-Chennai, Delhi-Kolkata and Delhi-Bengaluru, for tickets booked four hours before departure. Air India has an average load factor of 74 per cent across its domestic network while the seat occupancy on these routes is around 80 per cent.
Speaking to media, S Venkat, Air India Finance Advisor, said, “We are going to introduce new scheme for our all passengers who want to return same day flights in metro cities. Fares will be minimum Rs 5,000 and maximum Rs 10,000.”
“This is very attractive fare for all passengers. I am sure this scheme will attract the flyers as the fare is affordable. Earlier, we had launched “equal to Rajdhani fare” scheme, which had received good response. Now, we are launching the special fare scheme,” he added.
Last month, Air India had floated a scheme to fly unconfirmed passengers of Rajdhani trains at fares matching with the AC first class ticket prices. A Mumbai-Delhi air ticket is now available upwards of Rs 3,700 for next day travel on all airlines, while a Rajdhani AC first-class ticket costs Rs 4,755.
These have resulted in improved sales and better engagement with the trade. Ticket sales are rising on travel portals. Air India is engaging with agents and is implementing more customer-friendly initiatives. AI has also agreed to agents’ requests for web parity in fares, offering the same levels on its website and other portals. Thus, bookings for AI this year on travel portals like NC Airways, have increased with especially strong growth in long-haul international flights.
In FY16, the airline cut its losses to Rs 2,636 crore from Rs 5,859 crore in 2014-15, mainly due to a Rs 2,754 crore saving in fuel. “Fuel, of course, helped but I believe the turnaround has been due to efficiency in the management. We are now running the house like a proper corporate,” says Ashwani Lohani, Air India’s CMD.” He is of the view : “A professional firm cannot function on crutches. We want to fly, fly and fly more.”
Air India’s decision to reduce fares is likely to leave its rivals uncomfortable as they have been accused of raising the fares by 2-3 times for last-minute bookings.
Air India is going to offer last minute ticket prices equivalent to 2AC fares of Rajdhani trains on seven additional routes including from Delhi to Raipur, Patna, and Ranchi.
Air India expanded its spot fare scheme, wherein unsold seats are offered at 2AC Rajdhani rates four hours before a flight’s departure. These ticket prices are as low as Rs 2,240.
Air India Chairman and Managing Director Ashwani Lohani has said that Air Indiarier has an average load factor of 74 per cent across its domestic network while the seat occupancy on the trunk routes stands at around 80 per cent. The move to offer such tickets was aimed at providing relief to the passengers from last minute sky-rocketing fares and also to fill the vacant seats.
Air India’s move might pose competitive challenges for other private airlines, which generally charge very costly fares for last minute bookings.
“On account of popular response and with an aim to enhance growth, national carrier Air India has decided to add seven more centers under its ‘Spot Fares’ scheme,” Air India said in a statement.
“These fares would be available for sale within four hours of the scheduled departure of the flights. These fares are available for sale through city and airport booking offices, call centre and Air India website. The scheme is available for more than 100 flights across the country,” the statement said.
Tickets are also available on NC AIRWAYS.
“By introducing these fares we are not only able to generate additional revenue but also able to fill each and every seat till the last minute,” the statement added.
The scheme was launched on select domestic sectors from June 27 to September 30. Air India is already offering these fares on four routes and with the new additions, the total number of such sectors would increase to 11. The scheme is intended to offer fares equivalent to that of a 2AC of the Rajdhani Express.
The routes and their fares are –
It is already available on four trunk routes – Delhi-Mumbai-Delhi, Delhi-Kolkata-Delhi, Delhi-Bengaluru-Delhi and Delhi-Chennai-Delhi.
As per Ashwani Lohani, the rationale behind the move was to provide “flying at low, affordable costs to last-minute passengers”.