Thursday, 12 December 2019

Minister Rini: Garuda Does Not Violate Airlines Tariff Regulation



Petir Garda Bhwana

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  • TEMPO.CO, JakartaState-owned Enterprises (SOE) Minister Rini Soemarno was reluctant to point out the current high airlines tariff. She opined that air carriers especially Garuda Indonesia as SOE did not violate the regulation on the matter.

    “Transportation Ministry manages airfares, maximum and minimum rate. We just follow it,” said Rini after inaugurating the SOE building in the SOE Ministry office, Jalan Medan Merdeka Selatan, Central Jakarta, Sunday, May 5.

    Rini said the regulation on airfare was on the hand of Transportation Ministry. Referred to the ministry’s previous policy, Rini assured the current rate set by airlines did not exceed the limit. Even, she added, the cost was still within normal limits.

    In response to demands voiced by several parties to lower airlines tariff, Rini explained that her ministry has no authority to intervene in air carriers because the surge in tariffs for domestic flights was the corporate business policy.

    Read: Transportation Minister Still Grapples with High Airfare

    Garuda Indonesia is a public company and has its own cost-structure that will be accountable to the public. “[The airfare] calculation will, of course, follow their cost structure,” RIni added.

    Meanwhile, Transportation Minister Budi Karya Sumadi said the airfare issue was on the hand of SOE Ministry. So, according to him, Minister Rini has a role to discuss airfares with Garuda Indonesia.

    “I’m the regulator, while the one who has the authority to set the fare is Bu Rini,” said Budi Karya in the Coordinating Ministry of Economy office, last week.

    SOE Ministry was said to have a role in the decision-making related to airlines tariff considering its position as the majority shareholder.

    The issue of airfare has affected several sectors. According to the Central Statistics Agency (BPS), the transportation sector contributed 0.05 percent to April’s inflation rate. The inflation rate in April was recorded at 0.44 percent.