Monopoly in Indonesia: Angkasa Pura II Found Guilty by KPPU
Indonesia's Business Competition Supervisory Commission (KPPU) has concluded that it is proven that state-owned airport operator Angkasa Pura II has been engaged in monopoly behavior related to services and delivery of (incoming and outgoing) cargo and mail at the international airport of Kualanamu in North Sumatra.
KPPU member Chandra Setiawan added that the actions of Angkasa Pura II led to inefficiencies in business activities related to the handling of cargo at the airport.
The fully state-owned airport operator will now need to pay a IDR 6.53 billion (approx. USD $470,000) fine (which will go to the state's coffers). Meanwhile, the KPPU also urges Angkasa Pura II to lower rates for outgoing cargo and mail as well as to exclude the airport operator's business partners in the handling of incoming cargo.
The case started in 2016 when people complained about the high prices for cargo handling after the enactment of the Restricted Security Area (for incoming cargo) and Regulated Agent policy (for outgoing cargo).
Previously, for outgoing cargo, it cost IDR 350 per kilogram for the delivery of cargo from warehouse 1 to warehouse 2. Then, it would cost another IDR 800 per kilogram for the inspection of the cargo (at warehouse 2) and delivery to the airplane.
After the new policies were implemented, however, the price rose from IDR 350 per kilogram to IDR 1,000 per kilogram, while the IDR 800 per kilogram also still applied. According to the KPPU the steep price rise makes no sense because in the new context the tasks actually have become easier.
Meanwhile, for incoming cargo it was previously possible for owners to collect their goods at warehouse 2. However, after the implementation of the new policy access to warehouse 2 became restricted, hence people had to pay an additional charge of IDR 550 per kilogram for the delivery from warehouse 2 to warehouse 1 (where the cargo can be collected by the owner). This is obviously a good situation for the business partner of Angkasa Pura II that is licensed to handle the transfer of cargo from warehouse 2 to warehouse 1.
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