REPUBLIKA.CO.ID, JAKARTA -- Vice President Jusuf Kalla said that the increase in airline ticket prices was caused due to unhealthy competition between airlines. He noted that airlines had previously competed to sell airline tickets at low prices.
Kalla explained that selling commercial airline tickets at low prices is indeed profitable for getting a lot of passenger interests. However, he assessed the benefits are only valid for the short term.
"So if we press too cheaply, he has a ticket. It is also good, but for the short term. But in the long run, if they cannot buy a plane, we will get hit," Kalla noted at the Vice President's Office here on Tuesday.
The vice president gave an example of a number of low-cost airlines that eventually closed the company because they were no longer able to pay for operational costs.
"Managing airlines is not easy, especially if you want to withdraw cheaply. How many 'airlines' are closed? There was Batavia first, followed by the closure of Adam Air, Merpati, Mandala, and Sempati. All of them were closed because of bankruptcy," he added.
With the unfair competition, the air transport industry in Indonesia has been dominated by two large companies, namely PT Garuda Indonesia (Persero) and PT Lion Mentari Airlines. Kalla also revealed that the dominance was also caused by the death of airlines selling cheap airplane tickets.
"In my opinion, it is not a cartel, because they are too cheap and finally the others die. So it is not because it was designed, but because they tried to enter 'airlines' with cheap rates, and so they died," he explained.
Therefore, to avoid public panic in the face of rising flight ticket prices, the vice president asked all airlines to sit together and determine fixed operational costs.
"I think, even though they (the airline, red) are competing, they also have to keep calculating their fixed costs, as there is a basic price other than fuel, because 35 percent of the cost of the aircraft is for aviation fuel (avtur)," he pointed out.
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