Railways wants a system that will not pinch passengers’ pockets much but also help it achieve revenue targets

The Railways may soon revise its flexi-fare system on premium trains such as Rajdhani, Shatabdi and Duronto to get more passengers.

The Railway Board is considering selling half the seats without any surge pricing, top Railway Ministry officials said here on Friday.

The problem with the present dynamic pricing, introduced on September 9, 2016, is that the fares rise soon after the first 10% of the tickets on a train are sold, an official said.

The fares increase 10% with every 10% of the seats sold, with a maximum hike of 1.5 times the normal fares in sleeper, air-conditioned chair car and two-tier AC classes and 1.4 times in three-tier AC.

“We want to introduce a system that will be passenger-friendly. Half the passengers who book early can get the advantage of a relatively cheaper fare,” the official said.

The aim of the flexi-fare system was to generate additional revenues and reduce cross-subsidisation from freight.

Flat hike likely

The Railway Board is also examining a flat increase in fares on premium trains as on the New Delhi-Mumbai Rajdhani Express flagged off on October 17. The train does not have dynamic pricing, but the fares are 20% higher than the normal fares but around 19% cheaper than the highest fares offered on two- and three-tier AC coaches of other Rajdhani trains on the route.

The Railways attempted to lower the fares on the train by allowing passengers to opt out of the meals served onboard at the time of booking.

Recently, Railway Minister Piyush Goyal said the new train had got good response from passengers. “The popularity of the train service is growing. In fact, the new Rajdhani train is running full and there are no flexi-fares,” Mr. Goyal said at a press conference.

Win-win method

He told presspersons in October that the Railways would tweak the flexi-fare system in a way that “does not hurt people’s (pockets) and also meets the (Railways’) revenue target”.

The flexi-fare system generated additional revenue of ₹551 crore between September 2016 and June 2017 compared with the collections during the corresponding period in 2015-16, Union Minister of State for Railways Rajen Gohain informed the Lok Sabha in a written response in July.

Although the premium train passengers account for only 0.35% of the passengers carried by the Railways a year, their share in passenger revenues is 13-14%, Railway Ministry officials said.