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Another decree to be issued if airlines fail to cut fares: Minister

Jakarta Post - April 4, 2019

Jakarta – The Transportation Ministry issued two regulations last week with the aim of pushing airfares down, however it said that it may issue another regulation if prevailing regulations do not help reduce prices.

The newly issued regulations are Transportation Ministerial Regulation No. 20/2019 on airfares for domestic commercial airlines and Ministerial Decree No. 72/2019 on maximum airfare, which is a derivative regulation of the former.

"[The planned] regulation is in the form of ministerial decree. [But] if they decrease [the airfares], I will not issue [a new one]," said Transportation Minister Budi Karya Sumadi in Kemayoran, Central Jakarta, on Wednesday as quoted by tempo.co.

He said the planned decree would require airlines to allocate seats for subclass services.

He gave an example that under the planned regulation, airlines might be required to allocate only 20 percent of tickets for full services, 20 percent for subclass services with ticket prices 70 percent of the maximum prices.

He said after the issuance of the two regulations last week, only two airlines groups had reduced airfares, Garuda Indonesia Group – Garuda Indonesia, Citilink, Sriwijaya Air and NAM Airs and Lion Group – Wings Airs, Batik Air and Lion Air.

Lion Group announced that it would reduce airfares by 30 percent, while Garuda Group said it would decrease ticket prices by 50 percent from March 31 to May 13, Budi said, adding that NAM had decreased prices by 40 percent since early March for March and April.

He expressed the hope that Garuda Indonesia Group and Lion Group, as well as other airlines, would adjust their airfare schemes based on prevailing regulations. (bbn)

Source: https://www.thejakartapost.com/news/2019/04/04/another-decree-to-be-issued-if-airlines-fail-to-cut-fares-minister.html