COVID-19 hurts IRCTC’s plans; Ticket sales still down 77%

Inside IRCTC’s Golden Chariot | Source:IRCTC

The Indian Railway Catering and Tourism Corporation, which sells about 73% of India’s reserved railway tickets, said ticket sales continue to be down by about 77%-78%; almost a month-and-a-half after long-distance trains were restarted.

“Pre-COVID, we were doing 60 cr rupees worth of tickets a day,” said IRCTC CMD MP Mall. “Now, it’s 13-14 cr.”

All trains were stopped in late March to stamp out Coronavirus infections in India, and scheduled services were restarted only at the beginning of June.

Despite plans to ramp up quickly, the Indian Railways is operating at far less than its full capacity as people are reluctant to undertake long journeys over public transport due to the fear of contracting the virus.

This is largely owing to the fact that India continues to see a relentless increase in its Coronavirus cases, with fresh cases close to the 30,000/day mark, and doubling every 16-17 days. The country has overtaken Brazil this week to become No.2 in the world, behind the US, in terms of daily case additions.


Mall said he would not make any predictions about the future, and the company has adjusted its investment and business plans accordingly.

“Even the best of the institutes are not able to predict [the course of the disease],” Mall said. “There’s an MIT study which says there’ll be 3 lakh cases per day in India…Then there’s another study: ICMR conducted another study that it will peak in November.

“So we are just tackling the situation as it is coming.”

The COVID-19 crisis came at a particularly inopportune time for IRCTC, which started out as a food supplier to the Indian Railways in 1999 and eventually became the biggest e-ticketing company in the world.

Prior to the pandemic, IRCTC was taking its first steps towards becoming a full-fledged travel and tourism company by running trains under its own brand, as well as investing in hotels outside railway zones.

It also planned to start tourist-oriented trains, such as ‘Teerth’ or pilgrim specials, and even started two luxury trains — IRCTC Golden Chariot and Maharaja Express.

In the weeks prior to the lock-down, it also started three regular trains under its own brand — the Delhi-Lucknow Tejas Express, the Mumbai-Ahmedabad Tejas Express and the IRCTC Kashi Mahakal Express.

Like most long-distance trains in India, these trains are not running.

Mall said IRCTC has asked the Indian Railways to waive off the leasing charges on these trains as its business has been hit by ‘force majeure’ — factors beyond the company’s control.

At the same time, said Mall, the express trains were doing better than expected before the lock-down.

“When we started the Lucknow Tejas in October [2019], the projection was that we will break even in year two. The train ran till 15th or 16th of March. By that time, the train was about to reach break-even.

“The Mumbai [Tejas] train was started on 17 January. So it ran for two months. The reception for Mumbai train was much better and it was also nearing break-even,” he said. The Kashi Mahakal express ran only for 15-20 days.

Mall said the company sustained a loss of nearly Rs 2 cr over these three trains due to the unexpected arrival of COVID-19, primarily in the form of advertising and promotional expenses.

As for the luxury trains, booking is open for journeys starting from October, and customers will get a refund in case the trains are not able to be started as scheduled, Mall said.

Right now, he said, it is too early to take a call on cancelling the planned trips, but the possibility of cancelling the trips up to December cannot be ruled out.

“We will see till August, and may be, tours up to December, we will cancel, month by month. We will not cancel the entire year at one go. Then we’ll see how the position improves,” he said.


Another area where the COVID-19 pandemic is having an impact is on the company’s investment plans.

It had planned to launch trains under schemes such as Madhya Pradesh Government’s Mukhyamanthri Teerth Yojana or Chief Minister Pilgrimage Scheme.

Mall said investments that were supposed to convert into revenues in the shorter term are being deferred, while those targeted at the medium term are being continued.

“Some of the plans, we have deferred, especially those relating to tourism. We had planned to buy 2-3 trains for the Mukhyamanthri Darshan Yojana and State Teerth specials. The states’ financial situation will not perhaps permit them to promote this and secondly, tourism, as such, will also be [down].”

“But there are projects like the Lucknow hotel [that we are continuing]. We have just bought land at Kewadia where the Sardar Patel statue is there and we got approval for the purchase of a four-star hotel in lucknow just today only. Such things are going, which will materialize after some time.”