The Hindu Business Line : `Low-cost airlines no threat to Rlys'

According to the Railway Board Chairman, Mr R.K. Singh, the low-fare offerings by airlines would not wean away the Railways' high-end passenger traffic. "They (low-cost airlines) are no threat at all," Mr Singh told Business Line.

Starting on Tuesday, Air Deccan will operate flights between metros with Rs 500 plus taxes fare for its early bird travellers. The move marks the start of cheap airlines in the country, with several others planned over next year.

Indicating that the devil lies in the detail of these low-cost airfares, Mr Singh added, "As can be seen, most of these fares are available to customers with a number of strings attached. The cheapest fares are available to hardly 5-10 passengers. Moreover, the tickets cannot be refunded, need to be booked well in advance, etc."

"Even though some airlines had already started their apex fares since September 2003, last year the passenger traffic on Rajdhani Express, which are completely air-conditioned trains, went up by 15 per cent compared to the previous year," pointed out Mr Singh. The Railways carry around 226 million ticketed high-end passengers every year.

The Ministry aims to garner 25 per cent of its total passenger earnings from the high-end passenger traffic. For the current year financial year (2004-05), out of the estimated total earnings of Rs 13,940 crore, the high-end traffic is expected to contribute Rs 3,530.99 crore. The high-end traffic constitutes AC First Class, AC Sleeper Class, First Class, AC-III Tier and AC Chair car.

For 2003-04, the high-end passengers accounted for around 24 per cent of the total earnings of Rs 13,460 crore.

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