New terms on air ticketing to take effect

JAKARTA (JP): Measures will be taken against any domestic airline violating last May's air ticketing agreement that will finally take effect as of Nov. 1, an executive says.

The president of Sempati Air, Hasan M. Soedjono, told reporters here yesterday that the agreement was originally scheduled to take effect as of early July.

Six domestic airlines, Garuda Indonesia, Sempati Air, Merpati Nusantara Airlines, Mandala Airlines, Dirgantara Air Service and Bouraq Indonesia agreed in May to end a price war and set allowable discount airfare levels available to travel agencies and passengers.

Under the May agreement, discounts for travel agents will be limited to a maximum of seven percent of published tariffs, compared to discounts of up to 40 percent given to travel agencies beforehand.

The agreement requires airlines to pay a fine of up to Rp 10 million (US$4,589) for each violation against the agreement.

According to Hasan, the implementation of the agreement was postponed twice due to several reasons, including inconsistent opinions among the air carriers.

He said that revenue from the fines will go to the Indonesian Air Carriers Association (Inaca).

"We hope that the implementation of the agreement will increase the profitability of domestic airlines," he added.

The six air carriers last year made a combined profit of Rp 1.8 trillion.(icn)