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Monopoly watchdog issues warning to airlines over ticket pricing

Jakarta Globe - March 16, 2024

Monique Handa Shafira, Jakarta – The Competition Supervisory Commission (KPPU) has issued a stern warning to seven airlines against unjustified price hikes before Eid al-Fitr.

Among these airlines are the national carrier Garuda Indonesia and its subsidiary Citilink Indonesia, along with budget carriers like Sriwijaya Air, Nam Air, Batik Air, Lion Mentari, and Wings Abadi. These airlines were previously implicated in a cartel ticket case, which the KPPU ruled on June 23, 2020.

KPPU Chairman M Fanshurullah Asa emphasized that these airlines must inform the KPPU before considering any ticket price increases. This directive aligns with the KPPU's legal decision supported by the Supreme Court's ruling.

Previously, the KPPU found evidence that these airlines collectively provided mainly high-priced tickets, neglecting to offer sales for lower-priced subclass tickets. This restricted consumer options for more affordable fares.

Furthermore, these airlines collectively escalated flight cancellations after the cartel incident, aiming to reduce airplane ticket availability. Their parallel actions significantly disrupted market dynamics.

"The coordinated reduction in supply is a method to sustain high-priced ticket offers during the off-peak season," stated Fanshurullah.

In response, the KPPU imposed sanctions mandating the seven airlines to inform the commission in writing of any policies impacting business competition, ticket pricing, and public interest two years prior to implementation.

"Given the annual recurrence of this issue, compliance with the KPPU's final decision is imperative," he emphasized.

Meanwhile, the Ministry of Transportation discovered instances of ticket prices exceeding upper limit tariffs by three airlines. The KPPU intends to summon the seven airlines for further investigation in the near future.

Source: https://jakartaglobe.id/business/monopoly-watchdog-issues-warning-to-airlines-over-ticket-pricin