Coordinating Minister for Maritime Affairs Indroyono Susilo, left, walks with Transportation Minister Ignasius Jonan, second from right, before giving a press conferenceat the Air Force base in Iskandar, Pangkalan Bun, Central Kalimantan, on Jan. 7, 2014. (Antara Photo/Prasetyo Utomo)

Indonesia's New Airfare Regulation Comes Under Fire

BY :KENNIAL CAROLINE LAIA, FAROUK ARNAZ & YEREMA SUKOYO

JANUARY 08, 2015

Jakarta. Indonesian Transportation Minister Ignasius Jonan’s move to set a price floor for airfares, citing ostensible safety concerns, has drawn a wave of condemnation, with experts and lawmakers calling the decision irrelevant and unnecessary.

The minister’s adviser, Hadi Djuraid, announced on Tuesday that Jonan will issue a regulation that bar low-cost carriers such as AirAsia from offering tickets more than 40 percent below the price offered by mainline carriers.

“In the future, [budget carriers] can no longer offer cheap tickets, like say Rp 50,000 [$3.93]. The limit will be set at 40 percent [of prices set by non-budget airlines],” Hadi said as quoted by Detik.com. “We are still awaiting approval from the ministry of justice.

“This [regulation] was created to give [low-cost] airlines the financial means to increase safety standards.”

Transportation Ministry spokesman J.A. Barata added that the rule would only apply to domestic flights.

Aviation experts and lawmakers slammed the decision, saying the minister overstepped his authority.

Former Air Chief Marshal Chappy Hakim argued out that the minister could — and should — set a more stringent safety standards for all airlines rather than micromanaging their ticket and fee structures.

“When we talk about flight operations, it’s all about discipline and supervision. It’s as simple as that,” Chappy told the Jakarta Globe on Wednesday. “It’s important for the government to enforce existing safety regulations instead [of new fee structures].”

Aviation expert Gerry Soejatman called the minister’s move “a blunder” and “irrelevant to flight safety.”

“Ticket prices don’t have anything to do with the flight safety at all,” he said.  “If the government wants to improve [safety standards], they should conduct inspections to see if safety regulations are met.

“Issuing such a policy on ticket prices is just unreasonable. It doesn’t make any sense. Airlines are now far more aware of  safety [measures]. They realize that a bad safety [record] is damaging to ticket sales.”

The government’s proposed fare floor would not address the real problem: lax procedures by operations managers, air traffic controllers and safety inspectors, Gerry added.

Tulus Abadi, who chairs the Indonesian Consumers Foundation (YLKI), said ticket prices have more to do with service than safety, noting that accidents occur just as often on more expensive flights.

“Tourism can be affected by this policy. We hope that the government will consider [its impact on] other related sectors,” Tulus said as quoted by Tribunnews.com.

Meanwhile, the National Police said on Wednesday that its Criminal Investigation Division has formed a team to look into the Dec. 28 crash of Indonesia AirAsia flight QZ8501, despite the fact that the National Transportation Safety Committee (KNKT) has not yet issued any statements or findings as to why the aircraft plunged into the Java Sea about an hour into flight from Surabaya, East Java, to Singapore.

“According to our Criminal Investigation chief, the division is currently forming a team [that will work] alongside KNKT,” National Police spokesman Insp. Gen. Ronny F. Sompie said.

The squad “will investigate whether or not [the crash] was the result of a criminal violation,” he said. “Police are still collecting evidence and have not made any conclusions on the matter.”

The Transportation Ministry suspended AirAsia routes between Medan and Palembang on Tuesday for not having the required flight permits. The infringement came to light during an investigation into the Malaysia-based budget carrier’s operations in Indonesia, triggered by revelations that Flight QZ8501 was operating beyond the scope of the carrier’s license. The Surabaya-Singapore flight was permitted to fly four days a week, but not on Sunday, the day of the crash.

Jonan added that the ministry has also requested the involvement of the Corruption Eradication Commission (KPK).

In a statement released on Wednesday, AirAsia chief executive Tony Fernandes denied the violation, insisting the Surabaya-Singapore flights were given proper permission from Indonesian authorities “to fly seven times a week.”

“What happened is just an administrative problem,” he said suggesting that Indonesian authorities might have forgotten they had issued the license to AirAsia.

Fernandes contended that the AirAsia flight would not have been approved to land in Singapore by that country’s Civil Aviation Authority had the carrier failed to obtain proper permits from its Indonesian counterparts.

Criminal law expert Kris Laga Kleden from Surabaya’s August 17 University said police should launch an investigation into the ministry of transportation if it appears that QZ8501 did not have proper permission to take off.

“If [the aircraft] didn’t have a permit [to travel to Singapore] then why was it allowed to fly? Who authorized it?” he said.

House of Representatives lawmaker Bambang Haryo Soekartono of the Gerindra Party, however, was ready with answers: “The minister must take responsibility.

Determining whether a flight is allowed to operate is in the hands of the minister,” he said. “It is the [Transportation Ministry that should be investigated.”

Jonan conceded he had not ruled out  the possibility of his officials’ involvement in the apparent licensing discrepancy.

“I will not protect my men. Facts are facts. Whoever is responsible will face sanctions,” he added.

Yudi Widiana, deputy chairman of the House commission overseeing transportation, urged Jonan to wait for KNKT’s findings before creating new regulations.

“The ministry should show more empathy toward the victims and their family members. It should focus on the aircraft’s recovery efforts and finding the black box,” Yudi said.

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