Feb 23, 2005

Frequent traveller scheme in Indian Railways

The Indian Railways is facing stiff competition from Deccan Air a budget airline, and therefore it's borrowing a page from the marketing lessons of airlines.

Deccan Herald reports:

The Indian Railways (IR) is planning to launch a frequent traveller
scheme, a la frequent flyer scheme, to ensure that they are not lured by the
airlines. Also, like online bidding in airlines, IR may introduce the facility
in select popular trains on a pilot basis.The frequent train traveller (FTT)
scheme may become a reality any time after the February 26 railway budget to be
presented by Union Railway Minister Laloo Prasad Yadav.
The IR, sources say, is desperate to prevent upper class passengers
from being lured by airlines, especially the budget carriers. It is the upper
class which is the money spinner for the IR and hence this segment, along with
freight loading, becomes crucial. Although only less than one per cent of train
passengers travel in AC classes, they generate about 25 per cent of the railway
revenue.Differential pricingThus, even if a fraction of AC passengers switch
over to airlines, it will hurts IR very badly. He is also likely to announce
online bidding on trains. He may also announce the names of the trains available
for such bidding. The Railway Minister is also likely to announce the
introduction of differential pricing on select trains, aimed at improving
occupancy rate in the Indian Railways.

It would be interesting to see how this scheme pans out in reality. In my personal view, frequent flyer schemes are not such a big success. Essentially you're bribing someone to stick to your services. Railways, where people spend from their own pocket will not be able to bribe people specially if they can get cheaper faster travel in airlines like Air Deccan. I mean what would you rather have, fast travel from Bangalore to Delhi in 2 hours or a 24 hour Rajdhani train?

The railways would be better off marketing the journeys themselves as the destination (as the old cliche goes!) , specially in the case of scenic travels like Konkan railways, the toy trains at Darjeeling and Ooty, and a budget version of the exhorbitant Palace on Wheels.