Indonesia: Business watchdog calls on government not to intervene in airfares

• Apr 24, 2019

The Business Competition Supervisory Commission (KPPU) is calling on the government, particularly the Transportation Ministry, not to intervene in airfares, but let airplane ticket prices be determined by market mechanisms.

“When the government calls for lower airfares, it should base them on market mechanisms. There should be no pressure,” said KPPU commissioner Guntur Saragih in Jakarta on Tuesday as quoted by tempo.co.id.

Previously, Transportation Minister Budki Karya Sumadi issued a regulation and a decree to try to push airfares down. The ministry had threatened to issue another decree as most of airlines were reluctant to cut the prices of their tickets.

The government blamed the high airfares for the low occupancy rates of hotels and restaurants at tourist destinations across the country.

On Monday, Budi said that he would invite representatives of airlines to discuss airfares ahead of the most-waited Islamic holiday, Idul Fitri.

Guntur said that the KPPU did not focus on the high prices of airplane tickets, but instead the business players would abide by the regulations in deciding the prices.

Previously, the KPPU had reportedly investigated possible cartel practices behind the high prices of the airplane tickets, but Guntur did not talk about it on Tuesday. (bbn)

Source: https://www.thejakartapost.com/news/2019/04/24/business-watchdog-calls-on-government-not-to-intervene-in-airfares.html