Indian Railways to revise flexi-fares system on premium trains

The Indian Railways is planning to revise its flexi-fare system on premium trains such as Rajdhani, Shatabdi and Duronto in such a way that it does not hurt people’s pockets and also meets Railways’ revenue target. In this regard, Railway Board is considering proposal of selling half the seats (i.e. 50% seats) from existing 10% seats without any surge pricing.

Need

The problem with present flexi-fare system having dynamic pricing is that fares rise soon after first 10% of tickets on a train are sold. The fares increase 10% with every 10% of seats sold with a maximum hike of 1.5 times normal fares in sleeper, air-conditioned chair car and two-tier AC classes and 1.4 times in three-tier AC.

Revised flexi-fare system

The revised flexi-fare system aims to be passenger-friendly in such way that half of passengers who book early can get advantage of relatively cheaper fare. The Railways attempted to lower the fares of the train by allowing passengers to opt out, at the time of booking, of the meals served on board.

Flexi-fare system

The flexi-fare system introduced in September 2016 aims to generate additional revenues and reduce cross-subsidisation from freight through dynamic pricing of fares based on the demand. Under the present model, the base fares increases by 10% with every 10% of berths sold subject to a prescribed ceiling limit as indicated in table. The system has generated additional revenue of Rs. 551 crore between September 2016 and June 2017 compared with collections during corresponding period in 2015-16.

Month: Current Affairs - October, 2017