Domestic air traffic is booming but the travel surge seems to have given the railways a miss, especially in the more profitable air-conditioned classes. While air traffic grew 23% to almost 77 million during April-December, the number of passengers travelling in air-conditioned railway coaches, which touched 108 million, grew at less than 5%.
As a proportion of number of passengers travelling in air-conditioned coaches, air traffic was over 71%, which is a record in recent years. Just a year ago, it was a shade over 60%. As a proportion of AC passenger traffic, domestic air traffic used to hover around the 50% mark until 2014-15.
For Indian Railways, passenger traffic is subsidised by freight or cargo with fares, on an average, covering 57% of the cost. Air-conditioned coaches are comparatively less loss-making, although AC three-tier was making profit.
A NITI Aayog analysis showed that a couple of years ago, the railways was spending Rs 1.67 for every rupee earned from its passenger business due to its so called social obligation.
But a drop in air fares on the back of a fall in global oil prices, together with the railways’ experiment with dynamic pricing -which made AC travel more expensive for those booking late -meant that it was more attractive to fly. Read More…