June 24, 2020 / 2:28 AM / 18 days ago

Indonesia anti-trust agency says 7 airlines guilty over ticket prices

JAKARTA, June 24 (Reuters) - Indonesia’s anti-trust agency has found seven airlines guilty of hurting consumers by lifting airfares at the same time last year, but the carriers were not found to be acting as a cartel, the agency said in a statement late on Tuesday.

Rising air ticket prices in 2019 had triggered inflationary pressures in Southeast Asia’s largest economy, while also impacting hospitality businesses across the archipelago.

The agency, known by its Indonesian abbreviation KPPU, found Garuda Indonesia, its unit Citilink, rival Lion Group’s Lion Air, Wings Air and Batik Air, as well as Sriwijaya Air and its subsidiary NAM Air guilty of “concerted action or parallelism”, which means they follow one another’s move in setting prices and discounts.

They were ordered to report to the KPPU whenever they plan to raise ticket prices, the agency said, but were not fined despite violating anti-monopoly rules.

KPPU said it took into consideration the already tough trading environment for airlines amid the coronavirus pandemic when making its ruling.

The airline industry is controlled by a tight oligopoly, with the seven carriers controlling 95% of market share, KPPU said, recommending that authorities create rules to let more players enter the sector.

Garuda said in a statement on Wednesday it respected KPPU’s ruling and would adhere to principles and provisions of healthy business competition.

Lion Group did not respond to a request for comment, while Sriwijaya Air could not immediately be reached for comment. (Reporting by Bernadette Christina Munthe Writing by Gayatri Suroyo Editing by Ed Davies)

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