IRCTC looks to floor passengers, boost revenue with flowers, sweets

By Mamudi Das  www.thehindubusinessline.com

The ₹1,141-crore Indian Railways Catering and Tourism Corporation (IRCTC) known primarily for online train ticket booking, is probably the only public sector enterprise to have tied up with several new economy firms.

After e-tickets, e-catering, and tie-ups with e-commerce websites, the company is now exploring other avenues of revenue such as delivery of flowers and sweets to passengers on trains, IRCTC Chairman and Managing Director AK Manocha told BusinessLine.

E-ticketing contributes the most to the company’s margins, followed by tourism. Catering, which is a loss-making division, can move to being in the green with a boost from e-catering.

E-ticketing now accounts for only 54 per cent of the total reserved tickets, showing good scope for growth. The risk to this stream of business is a change in the sharing of service charge between Railways and IRCTC.

For instance, from a revenue share of 20:80 between Railways and IRCTC earlier, it has changed to 50:50 this year. But, from April 1, 2015, the e-ticket service charge has risen to ₹20 and ₹40 for non-AC and AC tickets from ₹10 and ₹20 respectively last year. For the IRCTC, the long-term risk is if the Railways were to permit other players to access the passenger reservation system directly, and also a shift away from trains as a mode of transport. More info

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