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Wednesday, May 5, 2010

Indonesia’s Garuda Denies Price-Fixing

Jakarta Globe, May 05, 2010

Garuda Indonesia is denying that it committed fraud after the country’s business regulator ruled it had illegally inflated prices.

National flag carrier Garuda Indonesia on Wednesday denied it had engaged in price-fixing after the country’s business regulator ruled it had illegally inflated prices.

The Commission for the Supervision of Business Competition (KPPU) fined nine local airlines 585 billion rupiah (64 million dollars) for forming a cartel to fix fuel surcharges and pass on the costs to passengers.

It found that customers of the airlines had lost around 1.5 billion dollars through the scam.

Garuda spokesman Pudjobroto said the company, which is set to raise around 500 million dollars through a public offering this year, was considering an appeal.

“We firmly reject the KPPU ruling,” he told AFP. “We all know that the application of a fuel surcharge is common in the airline industry around in the world. Fuel surcharges are applied by airlines in relation to fuel price increases.”

The competition watchdog fined Garuda Rp 187 billion for its part in the fraud.

Agence France-Presse

Related Article:

Garuda turns down KPPU`s cartel decision