Indian Railways Revenue Sees Major Shift in AC and Non-AC Ticket Sales
In a significant shift over the past five years, revenue from air-conditioned (AC) train travel in India has surpassed that of non-AC travel. This marks a major change in passenger behavior and spending patterns on Indian Railways since the COVID-19 pandemic.
Revenue Flip: AC vs. Non-AC
According to Budget documents analyzed by The Indian Express, in 2019-20, AC class travel (including AC First Class, AC 2-Tier, AC 3-Tier, and AC Chair Car) accounted for just 36% of Indian Railways’ total passenger revenue of Rs 50,669 crore, while non-AC travel (excluding suburban) made up 58%.
Fast forward to 2024-25, and the trend has reversed. AC class travelers are expected to contribute 54% of total passenger revenue, amounting to Rs 80,000 crore, while non-AC travelers will contribute only 41%.
Surge in AC Passenger Numbers
Despite AC passengers still forming a small fraction of total travelers, their numbers have more than doubled in five years:
- 2019-20: 18 crore AC passengers (2.2% of total 809 crore passengers)
- 2024-25: 38 crore AC passengers (5.2% of total 727 crore passengers)
Although total railway passenger traffic remains 10% lower than pre-COVID levels, excluding suburban passengers, it has almost fully recovered. In 2019-20, non-suburban railway traffic was 349 crore; in 2024-25, it is expected to be 334 crore.
AC 3-Tier Leads in Revenue
Among all travel classes, AC 3-Tier contributes the highest revenue. In 2024-25, this segment alone is projected to generate Rs 30,088 crore (38% of total revenue), with 26 crore passengers using this class.
Meanwhile, in the non-AC segment:
- Second Class (Ordinary & Mail/Express) passengers make up 35% of all travelers (256 crore passengers in 2024-25).
- These classes are expected to contribute Rs 17,558 crore (22% of total revenue).
Before COVID, these same non-AC classes accounted for 36% of passengers and 31% of total revenue.
Fare Hikes and Changing Travel Patterns
Over the past five years, Indian Railways has increased ticket prices by 6% to 25% across different classes. Suburban travel, however, has seen minimal hikes, with an average fare increase of just Rs 1.12.
- Sleeper Class fare (average per passenger):
- 2019-20: Rs 368.28
- 2024-25: Rs 407.48
- Second Class (Mail/Express) fare:
- 2019-20: Rs 116.38
- 2024-25: Rs 122.80 (+5.52%)
- Second Class (Ordinary) fare:
- 2019-20: Rs 26.55
- 2024-25: Rs 22.12 (-16.7%)
Decline in Suburban Travel
While suburban train usage has increased post-pandemic, it remains below pre-COVID levels:
- 2019-20: 460 crore suburban passengers
- 2025-26: 409 crore suburban passengers (estimated)
This decline is likely due to changing work patterns and a shift to metro and road transport options.
Conclusion
The rising preference for AC travel in India indicates a growing middle-class economy and a willingness to pay more for comfort. Meanwhile, non-AC travel, especially in general and sleeper classes, continues to serve a vast majority of passengers but with a decreasing revenue share.
As Indian Railways adapts to these changes, future policies on ticket pricing and service improvements will play a crucial role in shaping passenger choices.
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