The Indonesian antitrust regulator (Komisi Pengawas Persaingan Usaha - KPPU) found seven airlines guilty of price collusion in 2019, which resulted in artificially inflated airfares, but has decided not to punish them given the harsh market environment caused by the COVID-19 pandemic.
The authority said that Garuda Indonesia, Citilink, Lion Air, Batik Air, Wings Air (Indonesia), Sriwijaya Air, and NAM Air engaged in "concerted action or parallelism", wherein their commercial policies mirrored rather than competed with each other. According to the KPPU, such behaviour was clear evidence of a violation of anti-monopoly law. It underlined that the seven airlines are effectively owned by just three holdings - Garuda Indonesia Group, Lion Air Group, and Sriwijaya Air Group - and together control around 95% of the domestic market, thus having immense market power.
The KPPU ordered each of the airlines to report in writing any planned fare hikes going forward before they are implemented but decided against imposing any financial penalties.
The authority also suggested that the government review its lower and upper limits on domestic airfares in order to facilitate the entry of new airlines which would encourage more competition.
The KPPU also said that while the airlines colluded on a commercial level to inflate prices, affecting both ordinary passengers and the important tourism sector, they did not engage in more serious cartel-like activities. The latter would require agreements between senior executives, attempts at cover-up, sanctions for airlines breaching the cartel agreement, or full sharing of commercial information. None of this was proven to have happened.
