INACA slams antimonopoly watchdog's move<\/p>\n
JAKARTA (JP): The Indonesian National Air Carriers Association
\n(INACA) criticized the country's antimonopoly watchdog's moves to
\nrevoke INACA's right to set fares for domestic airline tickets.<\/p>\n
INACA chairman Wahyu Hidayat said on Friday he was not sure if
\nother agencies had sufficient knowledge on the airline industry
\nand thus set too low a fare.<\/p>\n
If plane fares are too low, the country's airlines would
\nprotest and demand a subsidy from the government, he warned.<\/p>\n
\"Setting fares at below market level would threaten the
\nairline industry.<\/p>\n
\"If this happens, airlines will ask for a subsidy,\" Wahyu was
\nquoted by Antara news agency as saying.<\/p>\n
The Business Competition Supervisory Commission (KPPU) earlier
\ncharged that the right to set plane fares granted by the
\ngovernment to the association was in violation of the 1999
\nantimonopoly law.<\/p>\n
KPPU chairman M. Iqbal said the commission had sent a letter
\nurging the government to revoke that right.<\/p>\n
Iqbal said plane fares should be decided by the government
\nbased on the recommendation of a team representing the
\ngovernment, airline industry and INACA.<\/p>\n
\"It is important the authority (to determine fares) is not
\nheld by the airline industry,\" he said in a hearing with the
\nHouse of Representative's Commission V for industry and trade
\naffairs on Wednesday.<\/p>\n
The legislators agreed with KPPU.<\/p>\n
Wahyu denied the antimonopoly team's allegations that INACA
\nfunctioned as a cartel by determining plane fares.<\/p>\n
\"INACA does not determine plane fares, only the floor and
\nceiling exchange rate for tickets ... the fare is determined by
\neach airline,\" Wahyu was quoted by Antara as saying.<\/p>\n
The standard exchange rate for domestic airline tickets is
\ndetermined by INACA, while the passenger fare per kilometer is
\ndetermined by the government, he said.<\/p>\n
Currently the passenger fare per kilometer is 11 U.S. cents.<\/p>\n
Wahyu said the standard exchange rate was set to enable
\nairlines to determine their own fares according to their
\noperational capabilities.<\/p>\n
The airline business is highly affected by the fluctuation of
\nthe rupiah against the U.S. dollar, he said, explaining that a
\ndomestic airline's earnings are in rupiah, while its operational
\ncosts are mostly in U.S. dollars.<\/p>\n
\"Every time the rupiah weakens, we domestic airlines,
\ntremble,\" Wahyu, who is also the president of state-owned
\ndomestic airline PT Merpati Nusantara, said earlier.<\/p>\n
Earlier this month INACA increased the standard exchange rate
\nto between Rp 5,000 and Rp 9,000 to the U.S. dollar from between
\nRp 4,000 and Rp 7,500.<\/p>\n
The association was forced to increase its standard exchange
\nrate because the rupiah had fallen below Rp 11,000 to the U.S.
\ndollar, he said.<\/p>\n
Wahyu said KPPU should discuss with the Ministry of
\nCommunications, INACA and the Indonesian Consumers Foundation
\n(YLKI), on the mechanism of setting plane fares and that INACA
\nwas ready to review existing fare setting mechanisms.<\/p>\n
\"Whatever policy is taken, the most important thing is not to
\nkill the airlines and neglect passengers,\" he said. (tnt)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/inaca-slams-antimonopoly-watchdogs-move-1447893297",
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