Minister allows KPPU to probe alleged cartelization behind airfare hike

Minister allows KPPU to probe alleged cartelization behind airfare hike

Transportation Minister Budi Karya Sumadi . (ANTARA/ Juwita Trisna Rahayu)

Jakarta (ANTARA News) - Transportation Minister Budi Karya Sumadi confirmed he will allow the Commission for Business Competition Supervision (KPPU) to investigate an alleged cartel practice behind the hike in domestic airfares.

"I think the KPPU can proceed with the investigation, as it has the authority. Let them look into it," Sumadi remarked on the sidelines of a training of trainer on anti-corruption here on Monday.

However, Sumadi believed there is no cartel practice behind the issue.

The minister made the statement in response to allegation that the recent increase in airfares was due to a cartel practice among airlines.

Indonesia`s airlines industry is dominated by two major players: the Garuda Indonesia Group that includes Garuda Indonesia, Citilink, and Sriwijaya Air and the Lion Air Group comprising Lion Air, Batik Air and Wings Air.

KPPU Commissioner Afif Hasbullah had earlier claimed he will examine the allegation.

"It is still an indication. If we can find facts or data, it is possible for us to investigate the case," he noted.

Cartel practice is a violation of Law No. 5 of 1999 on monopoly and unfair business competition.

The ministry`s Director General of Air Transportation, Polana B. Pramesti, remarked that the government had urged the Indonesia National Air Carriers Association (Inaca) to lower the ticket prices to placate the public and create a favorable climate despite the current tough challenges faced by air carriers amid the increase in price of avtur and the rupiah`s depreciation against the US dollar.

"This is because we take into account public complaints," Pramesti stated.

Reporting by Juwita Trisna Rahayu, Sri Haryati