VP Jusuf Kalla: Airfare Hike Product of Unhealthy Competition

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Laila Afifa

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  • Vice President Jusuf Kalla, accompanied by Finance Minister Sri Mulyani, Public Works and Public Housing Minister Basuki Hadimuljono and Jakarta Governor Anies Baswedan, monitors traffic congestion spots in the Greater Jakarta area (Jabodetabek) on a helicopter on Monday, January 28, 2019. Photo: Vice Presidential Media Team

    Vice President Jusuf Kalla, accompanied by Finance Minister Sri Mulyani, Public Works and Public Housing Minister Basuki Hadimuljono and Jakarta Governor Anies Baswedan, monitors traffic congestion spots in the Greater Jakarta area (Jabodetabek) on a helicopter on Monday, January 28, 2019. Photo: Vice Presidential Media Team

    TEMPO.CO, Jakarta - Vice President Jusuf Kalla said that the domestic airfare hike plaguing the national air carrier industry is the product of unhealthy competition among air carriers for overselling cheap tickets.  

    “Offering cheap airfares might be good for short term, but in the long term, it would prevent them from expanding their fleets. In the end, we are the ones that are hit by the effect,” said Kalla at the VP office on Tuesday, Feb. 12.

    Jusuf Kalla reminded that there have been numerous cases throughout history regarding cheap airlines that fail to survive the time, such as Adam Air, Merpati, Mandala, Sempati.

    “Adam Air, Merpati, Mandala, Sempati all had to close their businesses,” Kalla warned.

    He argued that the unhealthy business practice within Indonesia’s air transport industry caused the domination of two major airlines; Garuda Indonesia and Lion Mentari Airlines.

    “This is not by design, but mainly caused by those entering the industry by selling cheap fares that eventually die,” Jusuf Kalla remarked.

    ANTARA