The introduction of dynamic pricing for passenger fares for the first time by railway minister Lalu Prasad may have been aimed at competing with low-cost airlines, but the carriers are in no mood to accept the challenge and bring down the prices further. Low-cost airlines maintain that their fares for most of the sectors are still below the railways’ AC first-class and AC two-tier rates.
Rather than announcing an across-the-board cut in passenger fares, Prasad has brought in a dynamic pricing model, offering fare cuts according to peak and off-peak seasons. According to the proposal, there will be a 3% reduction in AC first-class fares for the peak season. For the non-peak season, it will be a 6% cut. For AC 2-tier, the peak and non-peak season reduction will be of 2% and 4%, respectively. AC 3-tier (new coaches) saw the maximum cut in fares with peak and non-peak season reductions of 4% and 8%, respectively.