Rail Budget 2015: Suresh Prabhu's announcement of 120-day advance booking window to hit airline industry

MUMBAI: Union railway minister Suresh Prabhu’s announcement to double the advance booking window for purchase of railway tickets to 120 days is likely to have an impact on advance bookings by airlines, said industry watchers.

“It will certainly have a major impact. Passengers, who plan their travel 60-90 days in advance, are the same who look closely at train tickets.

There is a clear overlap and so there will be some negative impact on air ticket sales,” said Samyukth Sridharan, chief operating officer of Cleartrip.com. The 120-day booking window will have a two-fold impact.

One is that customers can decide well in advance on their travel plans and therefore book other services as well, making the holiday cheaper by at least 20%. Second, it will have a direct impact on airline discount sales as low fares were primarily aimed at the budget traveller who travelled by train,” said Karan Anand, head of relations at Cox & Kings.

Prabhu announced the proposal on Thursday as part of the railway budget for the next fiscal year. It was one among a slew of measures which also included fast issuance of tickets at railway station, a 24-hour helpline number, a separate number for security-related complaints, SMS alerts for train arrivals and departures, additional general coaches in some express trains and air conditioned coaches in Mumbai’s suburban trains. Prabhu also announced projects worth Rs 96,182 crore to expand capacity of 9,420 kilometers of rail lines.

In 2013, the government reduced maximum advance booking period to 60 days from 90 days as an effort to prevent touts from capturing bulk of tickets in advance. Sridharan said the reduction had a direct impact on air ticket sales. “When the advance reservation period (ARP) window was reduced to 60 days from 120 says a couple of years back, we saw an increase in airlines’ advance purchase despite a 7% increase in fares for 60-days travel. The larger share of this benefit went to low-cost carriers,” he said.

Airlines, headed by SpiceJet, have in the last one year offered various discounts, some of them directly taking on the railways. For instance, on February 11, SpiceJet launched its “cheaper than rail” offer of tickets priced as low as Rs 599.