Airline alliance warned to avoid unfair practices
Airline alliance warned to avoid unfair practices
JAKARTA (JP): An antimonopoly watchdog has warned a planned
new airline alliance to abide by the law and not overstep the
boundaries of unfair business practices.
Chairman of the Business Competition Supervisory Commission
(KPPU) M. Iqbal said on Friday that as long as the alliance was
formed to benefit customers and not to prevent other airlines
from having a share of the market then it would not have any
trouble from the commission.
"But if in implementation there is suspicion of unfair
business practices, then the KPPU will investigate the matter,"
he told The Jakarta Post.
Four domestic airlines -- Mandala Airlines, Pelita Air
Service, Bouraq Airlines and Dirgantara Air Service -- are
planning to form an alliance early next month to cope with
mounting competition from other airlines.
Head of Mandala's development division Kus Winarko said
earlier that the alliance would enable the airlines to expand
their businesses and provide new destinations, without the need
to add more planes.
He said the four airlines would complement each others' flight
routes so that passengers could have more connecting flights to
more destinations.
An alliance between airlines means that if a passenger needs
connecting flights to another destination he does not need
several reservations, but could do so with one airline, which
would reserve a seat for him on another airline in its alliance.
Iqbal said that this was vulnerable to practices of unfair
business in which the allied airlines could prevent passengers
from reserving flights on other airlines.
"As long as the passengers are free to make their own choices
then there's no problem," he said.
Iqbal said that non-allied airlines should not see this as a
threat to their business but to treat it as an incentive to
further improve their services.
He said that at the moment KPPU saw no need to closely monitor
the activities of the alliance as its vulnerability to unfair
business practices had not yet been proven.
"But if later on there are reports of unfair business
practices, then we will investigate," Iqbal said.
According to the 1999 antimonopoly law, businesses are not
allowed to enter into agreements that would control the
production or marketing of goods or services which could prompt a
monopoly or unfair business practices.
The law also stipulates that an alliance that controls more
than 75 percent of the market of a certain product or service was
liable for suspicion.(tnt)