STEEP hikes in domestic airfares, by as much as 29 per cent quarter-on-quarter according to American Express India, have forced companies to replace air travel with train journeys.
Anurag Agarwal, managing director of Southend Travels, who has seen a drop of 15 to 20 per cent in air ticketing volume, told TTGmice e-Weekly: “The corporate sector has become more cautious, a result of steep domestic fares (and) little difference in fares offered by low-cost carriers and full-service carriers. In some sectors, fares are higher on low-cost carriers.
“Companies have cut down on non-essential travel. Train travel has also become more popular especially in areas where there are rapid train services such as Rajdhani Express and Shatabdi Express.”
Subhash Verma, chairman of Travel Plus and president of the Association of Domestic Tour Operators of India, has also observed a shift to train rides among corporate clients, along with a three per cent decline in domestic travel within India.
Verma said, “Corporates are looking at cost-cutting measures. They are trying to switch junior staff to train travel.”
On the weekend before the festival of Diwali, which falls on November 13 this year, airfares between Mumbai and Delhi on low-cost carriers such as GoAir and Indigo have reached as high as Rs16,000 (US$298), while Air India is charging Rs7,000.
In contrast, an air-conditioned, first class ride onboard the Rajdhani Express for the same sector costs the traveller only Rs4,000.
Sandeep Shastri, vice president and general manager of Global Business Travel, American Express India, said: “The increase in travel demand, inflation, reduction in flight capacity and flight network disruptions are some of the contributing factors to the increase in airfares. We believe that the environment will continue to be dynamic, and to stabilise business travel expenses, companies should look at cost-effective travel programmes and execute multi-year contracts with key domestic and international carriers.”
