It is virtually official now that passengers who preferred the comforts of air conditioned (AC) train coaches in the past now fly the domestic airlines instead. In a way the growth of domestic air travel in India is directly contributing to the declining earnings of Indian Railways, particularly its AC business, observes the Parliamentary Standing Committee on Railways headed by the former railway minister Dinesh Trivedi. The committee’s latest report has even put a number to this loss.
It says the shrinking AC business of railways — AC-I, AC-II, AC-III and AC Chair Car — is smaller by 20 per cent compared to the domestic air travel business last year. “While domestic air travel has grown by double digits over the last few years, Railways AC passengers registered a negative growth last year,” it said in its report. Which means, the 250-plus Rajdhani, Shatabdi, Express and special trains (with AC coaches) have seen fewer takers. As a result, the Parliamentary panel has directed the railway ministry to maintain data about domestic air travel as it impacts its own financial health and also to lend in competitive insights to railways.
Sample this: According to the Directorate General of Civil Aviation (DGCA), domestic airlines carried 81 million passengers between January and December 2015, a growth of 20.34 per cent over the period a year ago. Now when we apply the comparison provided in the report to the DGCA figures for the last calendar year, it appears that railways carried around 1.62 million AC-I passengers and 13.5 million AC-II passengers in the same period. The balance 49 million passengers travelled in AC-III and AC chair car. Overall, railways witnessed a slide of 50 crore passengers from the budget estimates for FY16 of 860 crore. The revised estimates numbers for passengers travelled stood at 810 crore.
As per the report, domestic air travellers made a “small fraction” of the AC business of Indian railways in early 2000. By 2015, the domestic air travellers were 50 times of AC-I and six times the AC-II passengers of railways, it said.
The panel is critical of the various charges that have steadily contributed to the increase in passenger fares and the overall cost forcing passengers to opt for the faster air travel. These include increase in cancellation, reservation, tatkal and the superfast surcharge among others. But undeterred by declining passengers and earnings, the railway budget has kept the passenger earning targets stiff for 2016-17 at Rs 51,012 crore, a 12.40 per cent hike over Rs 45,376.15 crore for FY 16. How will it be achieved and what will make passengers return to AC travel? Any answers?
BW Reporters
Ashish Sinha is an experienced business journalist who has covered FMCG, auto, infrastructure, tourism, telecom among several other beats. Ashish has keen interest in the regulatory scenario impacting different sectors. He writes on aviation, railways, post and telegraph, infrastructure, defence, media & entertainment, among a wide variety of other subjects.
