After flexi-fare, surge pricing on platform tickets likely

The increased fare burden of passengers of Rajdhanis, Shatabdis and Durontos due to the controversial flexi-fare system isn’t going to lessen anytime soon.

In fact, chances are that the platform tickets too could be included in the dynamic fare model resulting in an increase in its prices while entering the Railway Station at times when the premium trains are scheduled to depart, no matter if you even have to see off or receive a passenger of any non-premium train.

The six-member committee from various fields formed by the Railway Board last December with a deadline of one month to do a “review” of the dynamic fare slab of the national transporter could not come out with an alternative plan to reduce the burden of passengers of the premium trains. It rather suggested tweaking the entire telescopic fare of all the trains and recommended making an entry to platforms via tickets through the dynamic fare structure.

The flexi fare in premium trains has resulted in a revenue growth of `671 crore in one year for the Railways. On the flip side though, it has come at the cost of low occupancy in these trains. The committee factored the tariff pricing like that in the airlines and hotels suggesting a complete revamp of the existing model started during the tenure of Suresh Prabhu as Railway Minister.

Ever since Piyush Goyal took over, along with Railway Board Chairman Ashwani Lohani almost simultaneously last September, they have been making attempts to “review” the flexi-fare system indicating it could be slashed but sources confirmed that the “flexi fare is going to stay with more dynamism”. 

Given the Committee’s recommendations, Lohani, who during his tenure at the helm of Air India had offered competitive railways’ fares on the national carrier, is unlikely to have any option henceforth but to continue with the model initiated by his predecessor AK Mital. 

Sources said the members in a meeting recently were of the opinion that the Railways can dole out discounts on tickets if trains were not fully booked. The present model applicable in the aviation sector is that first the prices are low then it goes high and then later you get discounts on the remaining accommodations. “Just like the airlines and hotels where a customer gets discount at last minute, the Railways could also offer discounts on the routes with relatively low occupancy,” sources said.

After much dilly-dallying and weighing upon options over the past one year, the Centre had constituted the six- member committee to review the controversial ‘flexi-fare scheme’. The committee formed on December 11, 2017 under the direction of Railway Minister was mandated to review in 30 days the various other options of passenger revenue generation other than flexi-fare and also conduct an impact study about the competition faced by the national transporter from other modes of transportation including airlines.

The panel is believed to have also deliberated upon modifications in the existing flexi-fare system to offer passengers flexibility of rates during peak season, lean season or during week days, weekends or festivals just like that existing in the Delhi Metro fare scheme.

The flexi-fare system was launched in September 2016 which led to up to 50 per cent increase in fares. Under the formula, base fares increase from 10 per cent to 50 per cent with every 10 per cent of berths booked. While revenue increased, the railways lost passengers as several berths remained vacant.

The committee was headed by Railway Board Executive Director (ED), Passenger Marketing, with members from various fields including Revenue Director of Hotel Le Meridien, an Advisor from Niti Ayaog and an academician of Transport Economics from the Walchand Hirachand group. Air India’s ED Revenue Management officer, who figured in the six-member committee was, however, denied permission from her parent organisation to assist the national transporter.