Railways' flexi-fare might go two ways, low fares during off-seasons
The flexi-fare pricing system in the Indian Railways has till now worked only upwards: a rise of 10% in fares after every 10% seats are sold. But Railway Minister Piyush Goyal now says it is under review to introduce truly dynamic fares. "During off-season and when trains are not full, we may be able to give concessional fares," he said. Here's more about it.
What is the flexi-fare system?
Earlier, fares in trains like Shatabdi, Rajdhani and Duronto were fixed. In 2016, the railways introduced the flexi-fare system. Under it, after the first 10% seats, base fare increased by 10% with every 10% seats sold, capped at 50%. There wasn't any change in fares for 1AC and EC. Through this, the Railways gained additional revenue of Rs. 551cr during September'16-June'17.
What's working against this system?
However, despite increase in revenue, Railways registered a fall in ridership as several seats remained vacant. The three premium trains account for just 0.35% of the Railways' annual passengers, but generates 13-14% of the total passenger revenue.
Railways is mulling ways to lure passengers
Railways has been considering modifying the system in a way that "doesn't hurt people's (pockets) and also meets (Railways') revenue target". Options considered include keeping 50% seats under normal fare. Goyal says they are now mulling offering flexible rates according to peak/lean season, weekdays/weekends and during festivals. Earlier, the Railways had offered 10% rebate on vacant berths after the finalization of reservation charts.
