New ruling causes rise in air fares<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Economy-class passengers may have to pay up to 16.4 percent more
\nfor plane tickets after the Ministry of Transportation's
\nintroduction on Friday of reference prices for the airlines
\nindustry.<\/p>\n
Ministerial Decree No. 36\/2005 on the reference prices
\nstipulates that airlines are required to set their fares for
\neconomic-class scheduled domestic routes based on the reference
\nprices. The ruling is aimed at widening the government's
\nsupervision of passengers' security and safety as well as fair
\nbusiness competition.<\/p>\n
\"The government will use the reference prices as a tool to
\nsupervise the operations of domestic airlines in accordance with
\nflight regulations,\" transportation minister M. Hatta Radjasa
\nsaid.<\/p>\n
Although the decree does not specify sanctions for airlines
\nthat ignore the reference prices, the government said it would
\ninvestigate the operations of airlines that violate the
\nregulation.<\/p>\n
The decree says that should an air carrier sell tickets lower
\nthan the reference prices, the ministry's directorate general of
\nair transportation will investigate its organizational,
\nfinancial, operational and maintenance activities.
\n The directorate general will also ascertain whether security,
\nsafety and service-orientated regulations have been met.<\/p>\n
\"If the air carrier proves to have violated (the regulations),
\nthe government may revoke its license for serving the route
\neffected by the price violations,\" Hatta said.<\/p>\n
The decree says that the directorate general will report the
\nviolations to the Business Competition Supervisory Commission
\n(KPPU) for further investigation.<\/p>\n
KPPU head Sutrisno Iwantono, as quoted by Media Indonesia,
\nsaid on Thursday that the KPPU would take action against any
\nairlines violating the reference prices if it undercuts prices by
\nreducing costs maintenance and other basic activities that might
\nendanger the safety of passengers.<\/p>\n
Hatta explained that the reference prices were calculated on
\nthe basis of the operation of a Boeing 737-400 aircraft -- which
\nis regarded as efficient -- with a load factor of 75 percent and
\nthe aviation fuel price of Rp 4,530 (47.6 U.S. cents) per liter.<\/p>\n
Based on such a calculation, the price of a ticket for the
\nJakarta-Yogyakarta route will cost Rp 233,000, 11.4 percent
\nhigher than the price set by a government ruling introduced in
\n2003, and a ticket for the Jakarta-Medan route Rp 487,000, or
\n16.4 percent higher.<\/p>\n
Hatta called on passengers, members of the Indonesian National
\nAir Carriers Association and any other parties concerned to help
\nthe government in supervising the implementation of the new
\nruling on reference prices by reporting any violations to the
\ndirectorate general of air transportation. (001)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-ruling-causes-rise-in-air-fares-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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