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Lion Air and Garuda Indonesia refute claims of airfare surge above legal limit

Jakarta Globe - March 21, 2024

Ayos Carlos and Alfida Rizky Febrianna, Jakarta – Lion Air's founder, Rusdi Kirana, responded to the Business Competition Supervisory Commission's (KPPU) warning about the surge in airline ticket prices before the Eid al-Fitr homecoming.

The monopoly watchdog flagged at least seven domestic airlines, including Lion Air, which often set ticket prices above the upper limit tariff (TBA). Rusdi denied these claims.

"We're unsure what they mean. To our knowledge, we don't surpass the TBA, and fares remain consistent since the low season," Rusdi stated at Lion City Headquarters in Balaraja, Tangerang on Wednesday.

He stressed that Lion Group, encompassing Wings Air and Batik Air, adhered to regulations. "There are limits set by the Transportation Ministry. As long as we stay within those limits, we're not violating any rules," he added.

Rusdi emphasized that ticket prices couldn't be adjusted overnight. They must be recorded and approved by the ministry before sale.

However, he affirmed Lion Air's readiness to comply with KPPU's summons for further clarification on the ticket price issue, though none had been received yet.

"If there are misunderstandings, we're open to correction," Rusdi said, noting Lion Group's daily operation of 1,300 flights.

On another front, Garuda Indonesia's President Director, Irfan Setiaputra, noted adherence to government regulations regarding fare increases.

"We determine ticket prices according to government regulations," Irfan confirmed.

He also pledged Garuda Indonesia's readiness to respond to authorities' invitations if their tariffs breach regulations.

KPPU recently issued a strong warning to seven airlines, including Garuda Indonesia and its subsidiary Citilink Indonesia, plus budget carriers Sriwijaya Air, Nam Air, Batik Air, Lion Mentari, and Wings Abadi. These airlines were previously implicated in a cartel ticket case, as per KPPU's ruling on June 23, 2020.

Chairman M Fanshurullah Asa stressed that airlines must inform the KPPU before considering ticket price increases, aligning with legal decisions supported by the Supreme Court.

Source: https://jakartaglobe.id/business/lion-air-and-garuda-indonesia-refute-claims-of-airfare-surge-above-legal-limi