INACA punishes airfare discounters
JAKARTA (JP): The Indonesian National Air Carriers Association (INACA) has fined six domestic airlines Rp 10 million each for violating an agreement on allowable airfare discount levels signed in May.
INACA's chairman, Soelarto Hadisoemarto, said yesterday that the penalty was imposed on the airlines as they were found offering excessive discounts to travel agencies and passengers.
Under an INACA agreement signed on May 20, discounts for travel agents are limited to a maximum of seven percent, far less than previous discounts reaching more than 40 percent. The agreement, signed by Garuda Indonesia, Merpati Nusantara, Bouraq Indonesia, Mandala Airlines, Dirgantara Air Service and Sempati Air, was effective as of July 1, while the fines were effective as of Nov. 1.
The agreement also allows airlines to offer discounts of up to 15 percent to members of professional organizations attending special conferences, 25 percent to students, 35 percent to elderly people and 45 percent to veterans.
Return tickets may obtain a discount of up to five percent and tickets for tour packages 15 percent, while foreign tourists who use Indonesian airlines for their domestic flights and employees of travel agents and airlines can enjoy discounts of up to 50 percent.
The agreement requires airlines pay the association a fine of up to Rp 10 million (US$4,559) for each violation against the agreement, even though no agency has so far been assigned to control the fine collections.
"Actually INACA has found each airline guilty of more than one violation, but as `shock therapy' but for the beginning the association just fined the six airlines for one violation. The airlines can accept this," Soelarto said as quoted by Antara news agency.
He also said INACA, which groups 21 air carriers, will be stricter in imposing sanctions in the future.
According Soelarto, the association will hold a meeting to discuss endorsable tickets, which will help put a stop to unfair competition through airfare discounting. Endorsable tickets will allow passengers of an airline to fly another carrier which has the same route. (icn)