The country's low-cost carriers do not see any threat to their business from an across-the-board cut in rail passenger fares announced in the Railway Budget 2008-09, but industry watchers felt there could be an impact as the Railways was increasingly matching airlines on fares as well as service fronts.

"We do not foresee making any pricing changes as a result of initiatives announced by the Railway Minister. Our fares are very attractive for travel in all sectors," Indigo airlines president and CEO Bruce Ashby told PTI.

An official of JetLite, another budget carrier, also did not see any significant reduction in airline fares.

Railway Minister Lalu Prasad Tuesday announced a 5 per cent cut in second class passenger fares on mail and express trains, 4 per cent cut in AC-II fares and a 7 per cent reduction in AC-I fares.

Budget carriers typically compete with AC-II railway fares. Although no-frills carriers do not consider railways to be directly price-competitive with them due to vast difference in travel time, an industry expert said there is a section of population which will go for cheapest fares instead of time factor.

"I definitely see a downward trend, at least in the starting fare-scale of budget airlines," said Bird group executive director Ankur Bhatia.

Bird Group offers IT solution for air travel. Other initiatives such as in-train entertainments announced by Prasad will also give competition to airlines.