Jul 25, 2017

Railways blueprint confirms its fears: Air travel will be No. 1 choice in three years

The blueprint analyses government statistics to show that 25 per cent of domestic air travel happens over inter-city distances within 500 km — a segment where the Railways was always believed to enjoy a monopoly — contrary to popular perception that air travel is chosen only for 800-1,000-km distances.
indian railways, air travel, railway minister, railway blueprint, domestic airlines, long distance travel, indian express
(Illustration: Mithun)

A blueprint prepared by the Railways has just confirmed its worst fear: within the next three years, domestic airlines will overtake it as India’s most preferred mode of long-distance travel for upper-class passengers. The projection for 2019-2020 is detailed in a blueprint on the future business scenario prepared by the Railway Ministry, raising the first official red flag over the national transporter losing its upper-class clientele to the booming domestic airlines sector.
While speed has traditionally provided the edge for airlines, “price” has now given them a complementary advantage, says the blueprint, which warns that these two factors need to be taken up on an urgent basis.

The blueprint analyses government statistics to show that 25 per cent of domestic air travel happens over inter-city distances within 500 km — a segment where the Railways was always believed to enjoy a monopoly — contrary to popular perception that air travel is chosen only for 800-1,000-km distances.

”It is essential that Indian Railways addresses the two key value propositions of airlines passenger business — price and speed — immediately to sustain its core business in the passenger segment in the future,” it says.

This should serve as a “wake up call”, and require clear cut strategies on pricing and capacity augmentation, it says.
The blueprint is part of an internal assessment report commissioned by Railway Minister Suresh Prabhu and prepared by the Railway Board to map a comprehensive overhaul and possible course correction.

”With the proliferation of airports into small towns and massive thrust of low-cost airlines to Tier-II and III cities, there is a clear pattern emerging of air being preferred for even shorter hauls by passengers,” it says.

Apart from airfares coming closer to rail fares, proactive government policies like UDAAN, which provides for air travel of less than an hour for Rs 2,500 will also provide impetus to the civil aviation sector, the blueprint concludes.

”This should be viewed as an overall healthy trend for the economy,” NITI Aayog member Bibek Debroy told The Indian Express. “For shorter distances, the Railways had started losing share to the road sector, and now for long-distance travel, civil aviation sector has been claiming its share. Eventually, multimodal transport development will happen seamlessly, and it will not be viewed as an either-or binary of road and air travel,” he says.

The number of total passengers carried by domestic airlines has been spiking towards the 100-million mark for the last few years. They carried around 97.8 million between December 2015 and November 2016, the report notes. The comparable classes on Indian Railways — First AC, AC-II, III and First Class — carry on an average 145 million passengers every year.