Airfare discounters get another reprieve

JAKARTA (JP): For the second time, the working group of five scheduled domestic air carriers failed to reach an accord, thus delaying the imposition of sanctions for excessive airfare discounting, an industry executive says.

Chairman of the Indonesian Air Carriers Association (Inaca), Soelarto Hadisoemarto, said the working group -- comprised of Garuda Indonesia, Sempati Air, Merpati Nusantara Airlines, Mandala Airlines and Bouraq Indonesia Airlines -- assigned to decide the sanctions policy, has held several inconclusive meetings since early this year.

Soelarto told The Jakarta Post here during an Idul Fitri gathering with the Indonesian Hotel and Restaurant Association (PHRI) Friday evening that airfare price wars, therefore, will likely continue, much to the delight of conspicuous consumers.

"We hope the group can decide on the sanctions policy by the middle of this month so that the regulation can take effect soon afterwards," he said.

The regulation was originally scheduled to take effect on March 1.

"The members of the working group, chaired by Sempati's president, Hasan M. Soedjono, are apparently busy with private business related to the recent Idul Fitri holiday," Soelarto hypothesized.

He acknowledged that the working group was still arguing about the levels of fines to be imposed on carriers offering excessive discounts.

He also said that at the time of the first delay last month, the minutes of some of the group's meetings were not signed by all members of the group as they were on overseas assignments.

Under the prepared regulation, domestic air carriers are supposed to pay a fine of dozens of millions of rupiah if they are found discounting airfares by over nine percent for international flights and seven percent for domestic services.

Currently, air carriers routinely reduce ticket prices by between 15 and 40 percent. The government has been urging domestic carriers to end the fierce price discounting wars since last year. (icn)