KPPU Asks 7 Airlines From Garuda To Lion Air Not To Increase Ticket Prices Without Rational Reasons

UNSPLASH/Aldrin ILLUSTRATION Rachman Pradana

The Business Competition Supervisory Commission (KPPU) has asked the seven airlines that have been reported not to increase the price of plane tickets ahead of the Eid Al-Fitr 1445 Hijri holiday.

"Observing the significant increase in aircraft ticket prices every year ahead of Eid al-Fitr, the KPPU requested that the seven reported not increase prices without rational reasons and notify the KPPU before making a policy to increase ticket prices to consumers," said KPPU Chairman M. Fanshurullah Asa as reported by ANTARA, Friday, March 15.

Fanshurullah said that the seven airlines reported in alleged violations of Article 5 and Article 11 of Law Number 5 of 1999 related to Commercial Air Transport Services Scheduled for Domestic Economic Class Passengers (Ticket Cartel Case) namely PT Garuda Indonesia (Persero), Tbk, PT Citilink Indonesia, PT Sriwijaya Air, PT Nam Air, PT Batik Air, PT Lion Mentari, and PT Wings Abadi.

"This is in accordance with the KPPU's decision which has permanent legal force based on the Supreme Court's Cassation Decision Number 1811 K/Pdt.Sus-KPPU/2022 in 2023," said Fanshurullah.

He explained that in the case of alleged ticket cartels that were decided by KPPU on June 23, 2020, KPPU proved that the reported party together only provided subclass tickets at high prices, and did not open sales of several low ticket price subclasses.

This resulted in limited consumer choice to get tickets at a cheaper price. In addition, the reported party also increased flight cancellations after the cartel occurred as an effort to reduce supply," said Fanshurullah.

He explained that the cancellation of flight plans had increased significantly before and after November 2018. This is evidenced by several applications for frequency reduction and/or revocation of airline routes to the Ministry of Transportation.

The behavior of reducing supply together is an effective way to maintain subclass ticket offers at high prices that are applied together at low season times.

"The common behavior of the reported party is very efficient in distorting market performance considering that market control exceeds 95 percent of the reported parties as a whole," said Fanshurullah.

In the decision, continued Fanshurullah, KPPU imposed sanctions in the form of orders to the reported parties to notify the KPPU in writing every policy that would affect the map of business competition, ticket prices paid by consumers, and the public for two years, before the policy was taken.

Fanshurullah said the decision was then filed with objections to the cassation at the Supreme Court (MA). Finally, the Supreme Court won the KPPU through the Supreme Court Cassation Decision Number 1811 K/Pdt.Sus-KPPU/2022.

"Seeing the phenomenon that occurs repeatedly every year, the KPPU emphasizes that the KPPU's decision which has been inkracht must be obeyed," said Fanshurullah.

Fanshurullah said that in the near future the KPPU will schedule a summons to the seven airlines in response to several media reports related to the findings of the Ministry of Transportation (Kemenhub) regarding ticket price sales exceeding the upper limit rates made by three airlines.