The Telegraph
Since 1st March, 1999
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Airlines bring Nitish down to earth
New Delhi, Feb. 26: When airlines cut fares last August and brought them within striking distance of upper class rail fares, many had said that the people who travel by train would now prefer to fly.

The Cassandras have been proved true: the railways saw the number of travellers plunge 3 per cent from the previous year.

The discounted airline fares (which have since been extended till April) have spooked the railways, which have now riposted with their own discounted fare during a two-month off-peak period stretching from July 15 to September 15.

As a start, the railways will offer a 10 per cent discount on the basic fare during this period to passengers who opt for air-conditioned first class and AC II tier travel in Rajdhani Express.

Although the special fares will be applicable for the two-month period, officials have indicated that the railways could extend the scheme to other trains and for a longer duration.

“We felt that the APEX fares announced by the airlines were stipulated for a certain period. But since they have continued to extend this facility to its customers, there has been a minor shift of high-end passengers from railways. As a result, it was decided that we should also undertake such a measure to retain the market share with airlines,” said a railway board official.

The railways have had to revise their revenue receipts for 2002-03 to Rs 12,730 crore from Rs 13,450 crore in the budget estimates at the start of this fiscal, a fall of Rs 720 crore. Out of this Rs 720 crore, the decrease in revenue from the upper class passengers amounted to Rs 715.90 crore, a clear indication that they had either opted to fly or decided to stay at home.

When railway minister Nitish Kumar was quizzed about the proposed reduction in fares he said: “It is good to have competition. We are not acknowledging anything (that it has lost its creamy layer of customers) but we have to continuously improve our revenues from passenger earning. This is a measure on an experimental basis and can be extended.”

The airlines’ APEX fares allow passengers to book tickets 21 days in advance without the flexibility to either cancel the ticket, defer or advance the dates.

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