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Jakarta Post

Hoteliers pessimistic following new airfare policy

  • News Desk

    The Jakarta Post

Jakarta   /   Tue, May 14, 2019   /   11:36 am
Hoteliers pessimistic following new airfare policy The problem in aviation was unhealthy competition because the industry was only controlled by the Garuda Indonesia Group and Lion Group, he said, adding that without any fair competition, airfare issues would never be solved. (Shutterstock/hidesy)

The Indonesia Hotels and Restaurants Association (PHRI) has expressed pessimism at the notion that the government's policy to lower ceiling prices of airplane tickets by 12 to 16 percent will increase occupancy rates.

“Does a cut by 12 to 16 percent of Rp 2 million (US$138.77) make airfares cheap? Will the people accept it? I think not,” said PHRI deputy chairman Maulana Yusran on Monday in response to the government’s decision to lower airfare ceiling prices.

The problem in aviation was unhealthy competition because the industry was only controlled by the Garuda Indonesia Group and Lion Group, he said, adding that without any fair competition, airfare issues would never be solved.

He said there should be three or four airlines operating domestic flights to provide adequate competition.

“If business competition is healthy, healthy prices will follow. Such ceiling prices will not be needed,” he said, citing the example that there was no need for ceiling prices for flights from Jakarta to Singapore or Jakarta to Kuala Lumpur.

He questioned how ticket prices from Jakarta to Yogyakarta or from Jakarta to Padang could increase so significantly.

He expressed pessimism that the new airfares would improve hotel and restaurant occupancy rates that had declined by 20 to 40 percent this year, which was unusual because the decline was usually less than 15 percent during the low season.

“We will see the impact of [the airfare review]. But if [the Garuda and Lion Air] domination is still there, the policy will change nothing,” he added as quoted by kontan.co.id. (bbn)