Low cost carriers go all out to attract rail passengers

Low-cost airlines are stepping up efforts to woo rail passengers by taking the battle to the trains, but a clearly bemused railways is already crafting a counter strategy. In their bid to lure ‘chic’ train commuters, budget players like Air Deccan, SpiceJet, GoAir and IndiGo are all set to advertise in Rajdhanis and Shatabdis. They have also begun to offer incentives to rail ticket agents to draw the top 3% of rail passengers to the skies. On its part, Rail Bhawan has taken note of the development its counter plan will roll out via the forthcoming rail budget. According to sources, the budget may see “rationalisation” of Shatabdi and Rajdhani fares, introduction of more low-cost AC trains and revamp of catering services. The airlines, however, have their game plan clear-cut. SpiceJet plans to advertise inside Rajdhani and Shatabdi while rival IndiGo has already rolled out a campaign comprising pamphlets, posters and billboards at railway stations. Air Deccan too plans to kick off a similar campaign soon. About 3% of railway travellers are high-paying commuters, who can easily afford to fly a low-cost carrier (LCC).

Even if 1% of them start using airlines, the aviation sector could grow at about 35%,” said a senior Air India official. “We have tied up with specific travel agents selling rail tickets, which has resulted in many passengers shifting from railways to airlines. We are also planning to advertise inside Rajdhani and Shatabdi trains,” said SpiceJet VP (marketing & planning) Sanjay Kumar. Added IndiGo president & CEO Bruce Ashby, “We are using pamphlets, posters and billboards to lure railway passengers to airlines. We don’t know how effective this marketing strategy will be, but there is a conscious attempt to attract upper class rail passengers.” Air Deccan‘s campaign will be aimed at railway passengers and first-time travellers. “We want to take people out of villages, off the trains and into the planes,” said Air Deccan COO Warwick Brady. According to an ICICI Securities aviation sector study, LCCs plan to target the 49 million upper class rail trips against the 19.4 million air trips seen last year.

The study estimates that by 2008, the air-to-upper class rail passenger ratio will increase to more 75% from the present 40%. This will be driven by conversions and the overall increase in air travel, which, in turn, will largely be due to cheaper fares. But Indian Railways has its own plans. According to Rail Bhawan sources, besides the cost rationalisation in Rajdhani and Shatabdi fares, the ministry intends to roll out 35 air-conditioned (AC) low-cost trains to wean away passengers from LCCs. All AC train fares, expected to connect all important Indian cities, will be 40% cheaper than the present AC three-tier tariffs. That’s not all. Rajdhani’s catering services will also be improved. “Stringent quality control will be implemented in catering. We hope to spend about Rs 2 crore in improving food and services in trains between Delhi, Mumbai and Kolkata,” Indian Railways Catering and Tourism Corp CMD PK Goel said. But airline companies argue that low fares and lesser travel time, coupled with extra comfort, will ensure speedy migration of railway passengers to the skies.

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