Railways readies deep discounts to woo passengers

To tide over the problem of low occupancy it is facing, the Indian Railways is planning to offer last-minute discounts and reduced fares in major trains, including the Shatabdis.

The new fare system is expected to be launched in two months, and will replace dynamic pricing on these trains.

In September last year, dynamic pricing was introduced in 142 premium trains, including the Rajdhanis, Shatabdis, and Durontos. The pricing system, based on the ones used by cab aggregators and airlines, had faced criticism and low occupancy after airlines became a cheaper option for passengers. The scheme was later revised, after which there was some improvement in occupancy.

There are 26 pairs of Shatabdi trains in India. Railways Minister Suresh Prabhu is set to take a call in this regard soon.

During the previous financial year, the dynamic pricing system reportedly added additional revenues of about ~240 crore, but the flip side of this was that the number of passengers started declining. According to the figures available in April, occupancy was 95 per cent in the Rajdhanis, 75-77 per cent in the Shatabdis, about 82 per cent in the Durontos, and about 70 per cent in the Suvidha trains.

This has now forced the government to consider more sops including last-minute discounts based on occupancy.

Due to lower occupancy, the railways had on an experimental basis offered a 10 per cent rebate on the base fare of the last ticket sold on some premium trains just before the preparation of the first chart. A similar discount was offered on allotting vacant berths by ticket examiners.

“The plan is to extend discounts and offers on all the trains,” another official added.

Discounted fares in air conditioned chair car in select sectors of two Shatabdi trains — the New Delhi-Ajmer Shatabdi Express and the Chennai Central-Mysore Shatabdi Express — were introduced in December, and the discounts extended to 30 per cent in some sections.

“This discount for sections which are badly performing will be extended to all the Shatabdi trains

During the previous financial year, the dynamic pricing system reportedly added additional revenues of about ~240 crore, but the flip side of this was that the number of passengers started declining

within two months. In those trains or sections, the ongoing dynamic fare system will go,” said an official source close to the development.

During the first quarter of the current financial year, the national transporter was able to post revenue growth of more than 10 per cent, mainly because of a rise in non-fare revenue and due to the dynamic fare system. The combined revenue on passenger and freight segment stood at about ~43,000 crore during the first three months of the financial year 2017-18, compared to ~38,833 crore during the same period last year. Of this, the passenger segment contributed about ~14,000 crore, up ~2,000 crore from the ~12,000 crore in the corresponding period last year.

During the first quarter, 290 million tonnes of freight traffic was handled, leading to an increase of revenue from ~25,000 crore in 2016-17 to ~28,000 crore in 2017-18.