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A brief history of IRCTC
IRCTC stands for Indian Railways Catering & Tourism Corporation. It is a public sector company and is completely held by the Central Government. The IRCTC management reports to the Ministry of Railways. It has gradually become a subsidiary of the Indian Railways, since it manages its online ticketing, catering and tourism operations. To cater to all these important facets of the Indian Railways, the IRCTC business was founded on 27th September 1999.
IRCTC Business Model
The IRCTC Business model comprises of the following parts:
1. Catering and food – 48%
30% of this is via contracts and 18% via IRCTC itself. The largest portion of IRCTC business is its catering and hospitality facility. This part of IRCTC business began with the launch of pantry cars in Rajdhani and Shatabdi trains. This gradually grew to the point that IRCTC now manages pantry cars in over 460 trains. These pantry cars get their resources from 11 base kitchens spread out all over India. The multitude of food stalls and plazas at the Indian railway stations are also operated by IRCTC.
It also recently launched the E-Catering facility which allows travellers to order their meals online while on the train via an app. IRCTC has tied-up with many well-known food franchises for this too. Similar to airport lounges, IRCTC is also launching Executive Lounges in railways stations. This initiative has been quite successful in eight railway stations so far. Hence, more executive lounges are expected to begin in other stations as well. Furthermore, IRCTC is planning to renovate the waiting rooms at stations into proper budget hotel rooms equipped with all essential amenities.
2. Online ticket booking – 14%
IRCTC business began with online ticket booking in 2002. Approximately 8 lakh ticket bookings happen on the online ticket daily. This also accounts for about 70% of the total Indian Railways ticket booking. IRCTC charges a Convenience Fee on each ticket booking. This is how it makes its money.
3. Tourism – 27%
A growing sector of IRCTC business is tourism. The IRCTC tourism website houses information on tour packages, hotel bookings and flight bookings as well. The highlight of the packages is the availability of train-based tour packages. These tour packages include all the trains rides as well as hotel stays, meal plans, et all. There is also a vast variety of these tour packages available for selection.
The special tour packages also include the Maharajas’ Express tour package. The Maharajas’ Express is India’s most premium train. It includes luxurious rooms, restaurants, bar and all premium facilities. It truly is fit for the kings in all aspects. The cost of this train’s tickets ranges from Rs 10 to Rs 20 lakh. It is fully operated by IRCTC business as well.
4. Rail Neer – 11%
IRCTC business has 7 manufacturing units of Rail Neer across India which produce over 20 crore bottles of water annually. It is an ISO certified brand and highly in demand.
Privatization of trains
The Central Government has given two trains to IRCTC to fully operate. This includes two Tejas trains for which complete ticketing, catering and management will be done by IRCTC business. They will also themselves decide the train fare for these trains.
The Ministry of Railways has decided to sell 12.5% of IRCTC shares through IPO. IRCTC’s revenues saw an increment of 25% and net profit saw an increment of 23% in 2019. The addition of new business and features is expected to increase IRCTC’s profits and revenues even more in the near future.
Also read, Best Features Of IRCTC App.
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