Airline industry sees no ruboff benefits from rail fare hike

New Delhi: Does the rail passenger fare hike announced by the railway minister help the beleaguered aviation industry?

Probably not. There was a time while proponents of low-fare airlines said their real competition was upper class rail travel. But that scenario is no longer relevant as the hike in rail fares comes at a time when air fares are already rising because of the withdrawal of flights by Kingfisher Airlines and the resultant capacity correction in the industry.

To be sure, the fare brackets offered by the railways have never really been matched by airlines. So Wednesday’s fare hike is unlikely to result in any major shift of rail passengers to airlines.

Currently, only AC First Class rail passengers can well afford to fly economy on the Delhi-Mumbai sector after the rail fare hike, but then one may have to book a flight at least a fortnight in advance.

According to travel portal yatra.com , a First AC passenger on the Delhi-Mumbai Rajdhani had to shell out Rs 3,405 before Wednesday’s hike. From 1 April, the fare would be about Rs 450 more, or close to Rs 4,000. This compares quite well with the Rs 4,155  economy fare on a low-cost airline if bookings are done 14-15 days in advance.

Spot fares, which means fares for the same day of travel, remain quite high for Delhi-Mumbai and rule anywhere between Rs 9,854 and Rs 20,340.

A domestic airline veteran pointed out that the rail fare hike has been such that it may not impact the aviation industry in any significant way. “People who travel on First AC and are travelling on business have already shifted to airlines. For the rest, the railways continue to provide an enjoyable ride. So this traffic is unlikely to shift. Anyway, airlines are reporting healthy load factors in recent weeks due to the Kingfisher crisis and the rail fare announcements may not make much of an impact for them”.

Railway Minister Dinesh Trivedi announced a hike of 2 paise per km for suburban and second-class passengers. Fares for sleeper class were hiked by 5 paise per km. Fares for mail/express second class passengers are set to rise by 3 paise per km. Fares for AC chair car, AC 3-Tier and first class passengers were hiked by 10 paise per km, while fares for AC 2-Tier went up by 15 paise. AC First Class passengers will have to shell out 30 paise more per km.