Saturday, 7 December 2019

Budi Karya: Airlines Tariff under Authority of SOE Ministry, KPPU

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Laila Afifa

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  • Transportation Minister Budi Karya Sumadi. TEMPO/Fajar Pebrianto

    Transportation Minister Budi Karya Sumadi. TEMPO/Fajar Pebrianto

    TEMPO.CO, JakartaTransportation Minister Budi Karya Sumadi ensured his ministry would not intervene in setting airlines tariff considering the affair should have been handed to the market mechanism.

    “Based on the law, we are just mandated to set the upper tariff limit and lower tariff limit,” said Budi Karya during a meeting with the House of Representatives' (DPR) Commission V at the Parliament Complex, Senayan, Jakarta, Wednesday. June 12.

    Budi Karya made his statement following several criticisms came from parliament members complaining current high airfares. The Commission deemed tariffs of flight ticket surpassed the people purchasing power.

    One of the criticisms expressed by Democratic politician Willem Wandik saying high airfare hindered the mobility of Papuan people. Thus he suggested the government manage a regulation by granting a special price for air transportation from and to Papua.

    According to Minister Budi, institutions having the authority to handle the tariff are the Ministry of State-owned Enterprises (SOE) and the Business Competition Supervisory Commission (KPPU). SOE Ministry, he added, had a portion to ‘talk’ about airfares as it possessed the majority share of state-run airline Garuda Indonesia.

    “Garuda is the leading price. If it sets a price, other [airlines] will follow,” Budi Karya remarked.

    Meanwhile, the KPPU had a task to investigate and control airlines company should it suspected violation of duopoly practice. A duopoly was said to have been abused because of the fact that Garuda Indonesia Group (Garuda Indonesia, Citilink Indonesia, and Sriwijaya Air) and Lion Air Group (Lion Air, Batik Air, and Wings Air) dominate the national aviation industry.

    However, Budi Karya ensured no foreign airline violated the upper or lower tariff limit despite airlines tariff indeed hit the upper cap.

    FRANCISCA CHRISTY ROSANA