The surge-pricing model was an out of the box move seeking an increase in ticketing revenue.
Mumbai: Thanks to the addition of 18 per cent GST, fare for three premium long-distance trains — Rajdhani, Shatabdi and Duranto — will get costlier. Already, the railways has introduced surge-pricing model or dynamic fare, which works on the principle that a ticket would get costlier if the number of available seats decrease. This had led to a hike in fares last year. The surge-pricing model was an out of the box move seeking an increase in ticketing revenue.
The officials have expressed their fears that the increase in ticket prices might end up hitting the occupancy of these trains. It might even end up pushing the passengers to opt for air-travel instead.
An official said, “Dynamic fares have already pushed many passengers to opt for air-travel as the tickets tend to get expensive when their availability is low. For example, the AC-I class ticket costing a little over Rs 4,000 might cost Rs 4,500 if only two seats are left. So, a person might as well put in an extra Rs 1,000 and go by flight in almost one-fourth of the time.”
The dilemma of how to set fares in order to earn profits without losing the number of customers has become even more difficult after the addition of GST.
“Now, GST is added to the dynamic fare. So, the same Rs 4,500 ticket will cost around Rs 5,300. So, this is further likely to dissuade the public from travelling in the train.”
The railways had introduced dynamic fares in 2016; in fact railway minister, Suresh Prabhu at that time had said that this move would add in the much needed money to the revenue generated by these premium trains.