High flying Indian railways to ground low-cost airlines

New Delhi, June 4 (UNI) The Indian Railways has arrested the shift to wards the low cost airlines and regained the high-end passenger traffic, which grew by about 17 per cent in 2005-06 against continuous declines in the previous years, a study released here today said.

Even as the passenger traffic in no-frill airlines is growing by about 27 per cent, the Railways has also gained an impressive 16.9 per cent in terms of the premium class passengers, the study conducted by Associated Chambers of Commerce and Industry said.

According to the analysis, the reduction in First Class AC fares by 18 per cent in the last Railway Budget would further help the railways in increasing the premium traffic.

With the entry of a number of low cost airlines like Air Deccan and SpiceJet, the well-established airline brands like Indian and Jet Airways were also forced to give aggressive prices to the passengers.

This had a crippling impact on the railways, which lost the top-end passengers by 1.03 per cent, 1.87 in 2002-03, 2003-04 and 2004-05 respectively.

The airlines recorded a growth of around 10 per cent in the passengers handled till 2003-04. They increased their traffic number by 24.41 per cent with 39.86 million passengers in 2004-05. In the last fiscal, they handled 50.98 million passengers posting a growth rate of 27.90 per cent.

But the railways is now gearing up with various measures like e-ticketing and frequent traveller schemes, passenger profile management system, acceleration of speed, increased frequencies and extension of routes.

Constraints such as cracking airport infrastructure, spiraling aviation turbine fuel price, are going to pose major problems for the Low Cost Carriers.

With 1.8 million passengers travelling daily with the Indian Railways, the real challenge before the aviation industry is to wean away more passengers to travel by air, the study noted.

UNI CS DKS PC1459