Indian airline companies not worried about railway budget cuts

Indian airline companies not worried about railway budget cuts

The Indian railways budget was recently announced in the parliament and the main highlight of it was the upcoming discounts for travelers in the AC Class of the railways. These cuts are being introduced to make it lucrative for those consumers who prefer to travel through low-cost airlines instead of Railways.

However, the move has not bothered many airline operators in the country, as they believe that the Indian consumer is smart enough to realize the advantage of traveling by air considering the huge time saving it brings. And the price difference between railway tickets on higher-class segment is not much when compared to lower segment tickets on budget airline companies.

The three major budget airline operators in India, Air-Deccan, SpiceJet, and Go Air have all expressed that they are not worried about these new lower prices by the Indian railways. Air-Deccan CEO Captain Gopinath said in a statement: “Railways will never be able to bring down the traveling time. They can only bring down fares.”

He further added: “We are not going to bring down the fares any further only because the Railways have brought it down. So, we continue to focus on improving our efficiency and bring down costs. Since people save time with air travel, I don’t think people would mind paying 25-30% more to travel by air.”

Jeh Wadia, managing director of the Mumbai-based GoAir chips in: “Pricing is dynamic in this industry and we will price our flights based on our competition – both other airlines as well as other means of transport like the railways”.