TEMPO.CO, Jakarta - Air Asia Indonesia CEO Dendy Kurniawan asked the government to eliminate the lower limit for airfares. They made the suggestion after the government appealed to low-cost airlines to cut ticket prices for certain routes and hours.
"We actually want the bottom tariff erased," Dendy told Tempo, Friday, June 21.
According to Dendy, eliminating the lower margin for airplane ticket prices would encourage competition. Today, airfares are regulated to follow the top and bottom ceiling set by the government.
Dendy said without the limitation, AirAsia could provide attractive promotions and discounts.
The government first established the top and bottom ceiling rule in 2014. The rule, which was revised a year later, was set to anticipate price wars that could have led to a decline in service quality.
Meanwhile, the Transportation Ministry's spokesman Hengky Angkasawan ensured that the top and bottom limit for airfares would still be applied.
"The regulation has not been amended. And so it is impossible the limits to be eliminated," he said.
FRANCISCA CHRISTY ROSANA