THIS Is Indian Railways' Most Profitable Class: Not General Coaches Or First AC, It's...

For the financial year 2024-25, passengers traveling in AC classes are expected to generate 54% of the total passenger revenue, which amounts to Rs 80,000 crore. In contrast, those traveling in non-AC classes (excluding suburban passengers) will contribute around 41% of the revenue. Since the COVID-19 pandemic, the revenue share from AC and non-AC categories has almost reversed, witnessing a dramatic change. Thus, the AC classes will be contributing more than Rs 43,000 crore to the railways.

In 2019-20, AC travel accounted for only 36% of the total passenger revenue of Rs 50,669 crore, while non-AC travel contributed 58%. However, with the introduction of 136 fully air-conditioned Vande Bharat trains, the revenue from AC travel has grown significantly. Executive Class seats in these trains, with a 2x2 seating arrangement, are projected to bring in Rs 987 crore in FY26, up by 56% from Rs 698 crore in the previous year.

Though the percentage of Indian Railways' AC travelers remains in single digits, their numbers have more than doubled from 18 crore in 2019-20 to 38 crore in 2024-25. In 2019-20, AC travelers made up just 2.2% of the total 809 crore passengers. By 2024-25, they account for 5.2% of the 727 crore passengers. Despite this increase, overall passenger traffic is still 10% lower than pre-COVID levels.

Among all passenger classes, AC 3-Tier is the largest revenue contributor, generating Rs 30,088 crore or 38% of the total Rs 80,000 crore passenger revenue. It is estimated to carry 26 crore out of the total 38 crore AC passengers in 2024-25, making up 3.5% of total railway passengers. Within the non-AC segment, Second Class (Ordinary) and Second Class (Mail/Express) account for 256 crore passengers, representing 35% of total railway travelers. These categories together are expected to generate Rs 17,558 crore, making up 22% of total passenger revenue in 2024-25.

Over the past five years, Indian Railways has increased ticket prices between 6% and 25% across different classes. The average fare for Sleeper Class has risen from Rs 368.28 in 2019-20 to Rs 407.48 in 2024-25. Second Class (Mail/Express) fares have also seen a 5.52% rise, with an increase of Rs 6.42 per passenger.

The changing revenue patterns in Indian Railways highlight a growing demand for AC travel, driven by improved services and comfort. While non-AC travel continues to accommodate the majority of passengers, the revenue dominance of AC classes signals a shift in traveler preferences. The rise in ticket fares and increased earnings from premium travel options like Vande Bharat trains are reshaping the financial landscape of Indian Railways.