Railways looking at airline pricing model: Lohani

"The dynamic fare in airlines is really dynamic. It goes up and also comes down, decided by the demand and supply scenario", adds Lohani

The much-hyped dynamic pricing system that invited a lot of criticism for the Indian Railways may soon be converted into an airline-like model. This could mean that railway fares would go down during lean seasons.
 
Ashwani Lohani, the newly-appointed railway board chairman, said the railways were relooking at the new pricing system. Though a railway cadre official, Lohani was Air India chairman when he moved to the Railway Board in August, and, therefore, has seen the airline pricing model closely.
 
“I personally was not happy with the way dynamic pricing has been structured. We have to really look at the way airlines are doing it,” Lohani said in an interview.

 

The new system of pricing called flexi-fare or dynamic pricing was launched on September 9, 2016, on 142 premium trains, including the Rajdhanis, Shatabdis and Durontos.
 
The pricing system, based on the models used by cab aggregators, had faced wide criticism and led to low occupancy levels since airlines became a cheaper option for passengers.
 
“The dynamic fare in airlines is really dynamic. It goes up and also comes down, decided by the demand and supply scenario. If a festival is coming up, demand goes up, the fare goes up, while it goes down as well. Airlines also provide offers like one plus one when there is less demand. We have to look into something similar,” he added.

 
For six months the flexi-fare system was in place last year, the railways made an additional revenue of about Rs 240 crore. Occupancy of these trains dropped considerably. While occupancy was 95 per cent in the Rajdhanis, it was 75-77 per cent in the Shatabdis and about 82 per cent in the Durantos in July 2017.  
 
Under this pricing model, only the first 10 per cent of the tickets sold in premium trains will be available at the original listed price. After that, for every 10 per cent tickets sold, the fare goes up by 10 per cent. However, after the sale of 50 per cent of tickets, when fares are 50 per cent more than the original prices, there is no further hike.

 
Lohani added that an effort was being made to improve passenger services. As part of this, Indian Railway Catering and Tourism Corporation (IRCTC) is set to take over the catering operations of trains which have pantry cars serving food on board. However, he said, the first priority for railways would be the safety of passengers.
 
“We have to realise that we have an inadequacy of infrastructure. We will not permit any unsafe conditions in our tracks in railway stations. We will be having sufficient funds for the same,” Lohani added.
 
Lohani took over as chairman after 23 people died in a train derailment at Muzaffarnagar in Uttar Pradesh. The railway administration has been under public pressure for a series of accidents, including a stampede on September 28 at Mumbai’s Elphinstone station railway foot overbridge that killed 23 people.

 
“The recent Elphinstone incident was a sad thing for us. The fact remains that the station is totally packed at peak hours. A series of measures have been taken by the railways. In the next one year, we will build a lot of foot overbridges,” he added.   
 
On railway finances, Lohani said pension liabilities were a cause of concern. The railways fund their salary and pension bill out of their own resources unlike other government departments.