The romantic role of train travel in Russian
culture is slowly being unseated by cramped airplanes as flight
tickets become more affordable and government subsidies for
economy-class rail tickets are trimmed, according to a report from
"The Russian aviation industry has already
surpassed Russian Railways," said Andrei Rozhkov, senior
transportation analyst at Metropol. "The trends are clear, and we
can see already that these trends will remain in effect for the
The research, which is slated to be released
next week, was done at the behest of investment funds interested in
buying shares in national carrier Aeroflot and No.2 airline
Traffic on both trains and airlines is seeing
double-digit growth, but rail travel is losing market share. One of
the key issues is that some train tickets are increasing in price
faster than the cost of traveling the same route by air.
The average ticket price on Aeroflot rose 7
percent in the first nine months of 2011, while average train
ticket prices rose 10 percent, according to Metropol's study. Train
prices are expected to increase even more in the future following
the government's announcement that it will drastically cut
subsidies for Russian Railways.
State subsidies for rail travel have been cut in
half, from 30 billion rubles ($966 million) in 2012 to 15 billion
rubles in 2013. Meanwhile, the Transportation Ministry said this
week that it plans to give 750 million rubles in subsidies to
Russian airlines to keep regional ticket prices down. This measure
could cut prices on some domestic routes up to 50 percent.
Passengers traveling by third-class platzkart
rail will be hit the hardest by the reduced subsidies. The Federal
Passenger Co., a Russian Railways subsidiary for long-haul
passenger routes, estimated that price liberalization for the
cheapest train tickets would result in a 67 percent cost
Just getting these tickets could be challenging,
since the company has no plans to increase the number of platzkart
train cars despite high demand. The quantity of such cars has not
increased since 2011, Mikhail Akulov, general director of the
Federal Passenger Co. and vice president of Russian Railways, said
The practice of financing lower-class travel
through revenues from higher-priced tickets must stop, Akulov
"Starting next year, we won't have the
opportunity to continue this cross-subsidization within the
company," he said. "We are spending money that we skillfully earn
through the expensive segment not to develop that segment but to
fulfill obligations that are set by the state."
The liberalization of train ticket prices will
result in more passengers choosing to travel by air, Rozhkov said.
The shift will be felt most in shorter flights, since
medium-distance and long-haul travel will still be cheaper on
trains — though less so than in the past.
Metropol estimated that train fares for journeys
less than 1,000 kilometers would rise to 127 percent of Aeroflot's
price for an analogous ticket. Medium- and long-distance fares are
expected to increase to 40 and 28 percent, respectively, of prices
for a comparable Aeroflot ticket.
The Federal Passenger Co. has projects in the
pipeline to make rail travel more attractive. The company plans to
debut 50 double-decker train cars in 2013, shorten travel times on
several routes, expand the Wi-Fi network on its trains and roll out
more customer-loyalty and discount programs.
But Rozhkov said these measures are unlikely to
shift travelers' preferences.
"The key factors are cost and time of travel,
not access to Wi-Fi," Rozhkov said.
At the same time, trains would have the
advantage against regional airlines in terms of departure
frequency. Russian Railways may offer multiple travel-time options,
while regional airlines could be limited to one flight per
Russia has a lot of room to grow in terms of air
travel, Rozhkov said. The country's air mobility index, which is
used to estimate the annual number of flights per inhabitants, was
0.45 in 2011, while in developing countries the index ranges from
1.5 to 2.5.
The Russian government forecasts that the air
mobility index will increase to between 0.69 and 0.88 by 2020.