"This can be viewed as an abuse of position since Lion Air has a dominant share in the countrys domestic aviation market as it operates most of the flight routes in Indonesia," KPPU Chairman Syarkawi Rauf noted in press statement in Jakarta on Monday.
Syarkawi said according to the Anti-Monopoly and Unhealthy Business Competition Law, a business player that controls the market in an industry may not use its position to withhold the supplies of stocks that could cause scarcities and excessive price hikes.
The KPPU has supported the steps taken by the Ministry of Transportation to put in order guilty operators. After all, the aviation industry across the world is highly regulated, Syarkawi emphasized.
To this end, the KPPU has called on all flight operators, particularly low-cost carriers that have reduced their flights, such as Lion Air, to not take steps that are inclined to unhealthy business practices and can harm the interest of consumers.
On the occasion, the KPPU also urged the government to scrap its regulation on the lower flight tariff limit.
"We call on the Transportation Ministry to abolish the regulation on the lower limit of flight ticket prices as the implementation, so far, did not reduce the violations of aviation operational standards," the KPPU chairman affirmed here on Monday.
Syarkawi said the facts hinted that, so far, the implementation of the lower tariff limit on each flight route, which is some 30 percent of the upper tariff limit, had not reduced the incidents of violations of aviation operational standards by flight operators.
Moreover, the implementation of the lower tariff limit had reduced the number of passengers on several flight routes, particularly those to tourism destinations. Hence, economic growth in the concerned regions was affected, he added.(*)