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Cost Of Air Travel Sends India's Middle Classes Back To Railways


By Sumit Kumar, Section Local Transportation
Posted on Sat Aug 23, 2008 at 04:55:10 AM EST

India's middle-classes are rekindling their affair with long-distance train travel, as sharp increases in domestic airline ticket prices push many former frequent fliers back to the railways.

India has enjoyed a boom in domestic air travel, as low-cost carriers, led by Air Deccan, brought the once-seeming luxury of air travel within the reach of a far greater number of Indians, who previously relied on the country's colonial-era rail system for most long journeys.

Sharp rises in the price of fuel have increased India's domestic airline ticket prices by up to

20 per cent, prompting many cost-conscious Indians to turn away from air travel.

In July, India's airlines carried 12.6 per cent fewer passengers on domestic flights than a year earlier, at 3.04m.

At Indian Railways, the vast state network, traveller numbers in its more up-market, air-conditioned cars surged by nearly 50 per cent in the same period.

"We feel that some passengers are diverting to the trains from planes," said Anil Kumar Saxena, of the railways ministry, but he said it was too early to know whether the trend would last.

Pankaj Gupta, a partner in New Delhi's Outbound Travels, said "a lot of people can't believe that so recently it was x-y-z to fly somewhere and now it's up by 20 per cent. It's a shock to them. A lot of people are deferring their travel, saying 'we'll think about it and let you know'."

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Since the 1990s Indian Railways has sought to upgrade its service to appeal to more demanding consumers, introducing measures such as online ticket sales.

Raajveev Batra, head of KPMG's transport practice in India, said that leisure travellers were those people most likely to forgo flights and return to the trains while business travellers were still probably willing to pay a premium for a quick, efficient journey.

"The low-cost carriers helped people appreciate and realise the value of time," he said.

"People who still wish to pay more and save time will not go to other modes of transport . . . The drop is largely for those passengers who were leisure travellers. I am sure that they must be shifting back to other modes of travel."

Mr Batra said air carriers must now focus on boosting their efficiency, and predicted a period of industry consolidation.

"It's a good opportunity for airlines to be introspective and look at their business but I don't see doom for the carriers," he said.

Source: Amy Kazmin From The Financial Times Cost of air travel sends India's middle classes back to railways

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