Indonesia updates airfare regulations amid anger over high ticket prices
Indonesia’s transport ministry has issued new updated regulations determining the minimum and maximum airfares for all routes.
It comes after calls from consumer groups and the travel trade to lower fares which have spiked since the beginning of the year.
This had led to a big fall in domestic trips by air with some destinations reporting hotel occupancy rates had plunged by up to 40%.
Civil Aviation Directorate General secretary, Nur Isnin Istiarto says the new rules offers more transparency while a minimum price floor for tickets ensures a damaging price war will not develop which could ultimately impact air safety.
"With the new regulation, in determining the fares for each route, the airlines need to take into account the input from service users and consumer protection, and pay attention to unfair competition. The airlines also need to properly disseminate information on fares," Isnin said.
Apart from Indonesia AirAsia which focuses more on international routes, the domestic aviation market is dominated by the various airline brands of Garuda and Lion Air.
The Jakarta-Surabaya route has been set at a mimimum of IDR480,000 (about US$33) up to IDR1,372,000, and Jakarta-Bali is IDR578,000 to IDR1,651,000.
"For now, we hope airlines will adopt the new regulations so we do not have to make more rigid rules such as regulations for subclasses. The industry can be more independent but at the same time still adhere to the applicable regulations," said transport minister Budi Karya Sumadi.
Garuda and Lion Air said they will implement the new regulations.
The previous regulations were quite similar but now the civil aviation directorate general can intervene when necessary to make recommendations or revise floor and ceiling ticket prices on a route-by-route basis.
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