Tuesday, February 27, 2007

On uneven plane

Travellers may not take it lying down: the 2% to 8% reduction in sleeper and AC class fares is unlikely to stop passengers opting for planes instead of trains. Even though train travel will become cheaper, the competitive edge of low-cost carriers is unlikely to be blunted and they are confident of luring upper-class railway commuters.
For instance, a 6% reduction in the lean season fare for AC first class will reduce Rajdhani’s Delhi-Mumbai tariff by about Rs 250 to Rs 3,900 from Rs 4,150 at present. However, this will still be higher than the average air fare offered by LCCs for the same route — ranging between Rs 3,000 and Rs 3,550.
While the railway ministry believes the cut in AC fares will give LCCs a run for their money, airline companies felt it would not have any major impact on them.
Nor do LCCs such as Air Deccan, IndiGo, GoAir and SpiceJet plan to change airfares after this announcement.
27/02/07 Economic Times/Economic Times