Thursday, 23 January 2020

Transportation Ministry will Not Removing Airfare Limit



Laila Afifa

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  • TEMPO.CO, JakartaTransportation Ministry has recently concerned about a recommendation on the removal of price ceiling (TBA) and price floor (TBB) of airlines tariff. Several parties demanded the ministry discard the TBA and TBB to return the standard airfare as in the previous year.

    Responding to the input, Transportation Minister Budi Karya Sumadi said that his ministry would not issue such a policy. “We protect consumers and corporations,” said Budi in an interview with Tempo in Grand Sahid Jaya Hotel, Sudirman, Central Jakarta, Thursday, May 9.

    The legal minimum price for airlines ticket, according to Budi, would safeguard the public from the impact of airlines’ price war. If the regulator did not rule the price floor, the competition would become unhealthy, and the convenience and security would be affected.

    Meanwhile, ruling the maximum price would control the airfare from soaring too high. According to Budi Karya, the TBB and TBA calculation was in consideration to the total operating cost and load factor. Thus, each flight route has different rates.

    The suggestion on the elimination of TBA and TBB was earlier addressed by the National Consumer Protection Agency head Ardiansyah Parman. According to him, the price ceiling would limit the airlines’ flexibility in providing service for consumers.

    He opined that flight companies could apply tariff under the price floor in a certain condition, such as when the airplane lack of passenger. “While for this current situation, there is no chance to do that. If an airline sells tickets under the minimum price, it’s a violation, that means the chance is gone,” Ardiansyah said.


    Read: Budi Karya: Without Regulation Online Ojek will be Disfranchised