Jun 13, 2016

Dynamic Fare may derail Railways as it soars close to airfare

MUMBAI: Dynamic pricing on Suvidha Special trains has proved counterproductive for the railways as most trains are running below potential, especially the two-tier air-conditioned coaches, due to the higher tariff.

Suvidha Special trains have a minimum fare equivalent to tatkal fares which increase after every 20% of seats/berths in a train are booked, subject to a maximum of three times the tatkal fare.
So, in this dynamic pricing, fares keep on increasing as per demand and vacancy. The initial 20% of seats are sold at the base fare plus tatkal charges. For the next 20%, fare is 1.5 times the base fare plus tatkal. Fare for last 20% is thrice the base fare plus tatkal.

A senior railway official said, "For 2A, the demand is pretty poor as the fare is sometimes higher than airfare."

A review of two trains was conducted by Central Railway to assess the demand. It was seen that overall occupancy for 04419 LTT-Nizamuddin was 40% but for 2A it was 28%and for 3A it was a good 45%.

For LTT- Mandaudih, the occupancy for 2A was 32% as against 44% for 3A. The overall occupancy was 43%.

The official said that 3A class is a money-spinner although the occupancy is not excellent. For LTT-Nizamuddin and LTT-Mandaudih, the earnings for 3A were 70%.

The official added that on June 10, a Mumbai-Delhi flight ticket in economy class was available from Rs 3,806 for June 15. On the other hand, 2A ticket for the same date in 04419 LTT-Nizamuddin was available at Rs 3636.

A senior railway official said, "How can we expect a passenger to pay the fare equivalent to airfare for train journey?" There are five 2A coaches in LTT-Nizamuddin. CR has now asked the board to allot 3A coaches instead as demand is very poor for 2A.

For 01087 LTT-Manduadih Suvidha special on June 17, the ticket prices for 2A as quoted at Rs3,216 on June 10. Manduadih is the terminal station for Varanasi, the air-fare was Rs 4,800 for the same day flight.

An official said, "The Suvidha train dynamic fare concept is good for 3A but for 2A it is expensive because fares are high."

SOURCE - TOI

 

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