Piyush Goyal junks report suggesting airline-like dynamic pricing in railways

New Delhi: Railway Minister Piyush Goyal has asked a committee, set up to review the flexi-fare scheme, to go back to the drawing board and draft a fresh report after it suggested introducing dynamic pricing, like airlines, in the railways, officials said. The Committee, formed in December last year, had a mandate of assessing the impact of flexi-fare scheme in its current form on railway revenue and on passengers -- in terms of their choice of the railways as a means of transport with increased fare.

The committee, which submitted its report on January 15, had suggested dynamic pricing, like the one applicable in the airlines, for all mail express trains. It suggested ticket prices may vary on various factors such as higher prices for a train which takes lesser time to travel compared to others, additional charges for lower berth and travel during festival times. It also recommended passengers be made to pay more for choosing premium trains and also for booking close to departure dates.

In a nearly 20-minute meeting on flexi-fare on March 13, the minister is believed to have expressed his unhappiness over the proposals and asked the committee to take a relook since data showed that in its current form the flexi-fare scheme has already resulted in higher revenue and increase in number of passengers.

The committee consists of some Railway Board officials, NITI Aayog adviser Ravinder Goyal, Executive Director (Revenue Management) of Air India Meenakshi Malik, professor S Sriram, and Iti Mani, Director, Revenue, Le Meridien, Delhi. Senior officials of the ministry also said flexi-fare scheme has been beneficial for the national transporter. They maintained there has been an increase in number of passengers as well as earnings in flexi-fare trains (Rajdhani, Duronto and Shatabdi) in the six months period from September to February.

In 2015-2016, when flexi-fare was not applicable, the data show 138.71 lakh tickets were booked and railways earned Rs 1931.6 crore.

With flexi-fare system introduced from September 2016, in 2016-2017, 137.39 lakh tickets were booked and railways' earnings rose to Rs 2,192.24 crore. The next year, while 140.88 lakh (till February 2018) tickets were booked, the railways' earning from it further rose to Rs 2296.75 crore. The flexi-fare system 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.