Financial Daily from THE HINDU group of publications
Saturday, Feb 25, 2006
Financial Daily from THE HINDU group of publications Saturday, Feb 25, 2006 |
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Industry & Economy
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Railway Budget Logistics - Airlines Airlines not perturbed by reduced AC rail fares Our Bureau
New Delhi , Feb. 24 The domestic aviation industry is not losing sleep over the decision of the Railway Minister, Mr Lalu Prasad, to reduce first and second air condition class fares. A cross section of airline officials felt that the availability of low air fares, the growing number of middle-class, the manifold increase in disposable income and the charm of flying rather than going by train were factors that would continue to attract passengers to fly rather than take a train journey. "The reduction of fares by Rs 150-200 will not lead to a passenger deciding to travel by train instead of flying. In any case at the lower end, our fares on the Delhi-Mumbai sector is less than the discounted AC II tier fare," the SpiceJet Director, Mr Ajay Singh said. Echoing similar sentiments, the Managing Director, Air Deccan, Captain G.R. Gopinath, said the reduction announced by the Railway Minister would not affect the airline. "It is heartening to note that the airline industry has managed to wake the sleeping giant in the Indian Railways. "However, the latest move will have no impact on Air Deccan, especially as the bulk of fares offered by us are below the railway pricing. "Besides, the passenger manages to save a huge amount of time if they are travelling across the country," Captain Gopinath said. The President and Chief Executive Officer of the soon to be launched low cost airline, Jagson Airlines, Mr Uttam Kumar Bose, also felt that the latest move would have no impact on the aviation industry. Industry analysts felt that the airline industry would probably have sat up and taken notice if the Railways had dropped fares to the Rs 1,700-1,800 range. "The aviation industry would have had a real challenge on their hand if the fares would have dropped to the Rs 1,700 level. "At the moment, we need to see whether the yields of Railways will go up due to the latest announcement or not," an aviation industry analyst said. With 1.8 million passengers travelling daily with the Indian Railways, the real challenge before the aviation industry was to wean away more passengers to travel by air, analysts added.
More Stories on : Railway Budget | Airlines
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