Tuesday, February 27, 2007

Low-cost carriers not ruffled by rail fare cuts

New Delhi: The introduction of dynamic pricing for passenger fares for the first time by railway minister Lalu Prasad may have been aimed at competing with low-cost airlines, but the carriers are in no mood to accept the challenge and bring down the prices further. Low-cost airlines maintain that their fares for most of the sectors are still below the railways’ AC first-class and AC two-tier rates.
Rather than announcing an across-the-board cut in passenger fares, Prasad has brought in a dynamic pricing model, offering fare cuts according to peak and off-peak seasons.
The peak season for rail travel is between April 16 and July 14 and September 16 and January 1.The move to bring down upper-class fares has been designed to attract more traffic because during 2006-07, earnings from these fares at Rs 3079.61 crore were lower than the Budget estimate of Rs 3,174.80 crore.
Welcoming the new Railway Budget, SpiceJet CEO Siddhanta Sharma said, “The low-cost carriers feel that the revolution started by them is paying dividends not only to air travellers but to train passengers as well.”
The man who kicked off the low-cost revolution in the country, Air Deccan managing director Captain GR Gopinath, reflecting on the Budget, said any revision of air fares was unlikely as a step against reduction in the railway fares.
26/02/07 Financial Express