Unfair competition airlines

Name: Yulianti

Nim: 224107189

Class: MTU A -10

2.Theoretical Basis

The foundation of the theory that I will give to unhealthy competition among airlines. Government in this case serves as an important regulator khususnys issued regulations regarding air transport. Supervision of government or the government’s role in the determination of tariff tdak aircraft to avoid unhealthy competition, the government tried to increase the reference rate. Reference rate is a tool that does not violate airline flight safety components. Reference rates had a positive impact on passenger safety and the future of airlines. With relatively equal plane fare, indirect management of the company will be forced airlines creative, efficient, and in the proper segmentation can build quality and service excellence in corporate airlines.

According Pitelis (2008) “competitiveness is both elusive and controversial” (competition elusive and controversial), while Porter (1993) states that “The strategy is about competitive position, differentiate themselves in the eyes of the customer, and added value through joint activities different from those used by competitors. ” The end goal is the development of competitive strategy In order to win every competition, every company should have a strategy to compete in a creative and clever in tackling environmental forces and interests.

The proliferation of low cost airlines in Indonesia began standby airline deregulation by the government in 2011. This rule gives an opportunity to the entrepreneurs in business aviation services with one plane and very little capital. Thus in line with this development many airlines use the concept of LCC (Low Cost carrier), the decrease in operating cost as low as possible. This business is air transportation services using a service-paced efficient, simple, and concise.

New operators applying low rates though have not yet reached the status of low cost airlines. A number of new operators succeed in business because of investor capital or subsidies. So did the old operator, are both facing a difficult problem. In the airline business, their market share is limited merebutkan to get dollars, while debt in the form of U.S. dollars. Unfair competition could be avoided if early acting selective regulator. Things like this that lead to war among airlines with lower costs and reduce comfort aviation operations, including passenger safety.

Some low-cost business practices:

1. Single passenger class

2. Ticket sales through the internet

3. Commonly used A320 aircraft / BOEING 737

4. Flight time in the morning or in the afternoon to avoid land tax is more murah.Dll

Determination of the air fares have been arranged in NO transport minister’s decision. 8 year 2012 on: mechanisms of determination and formulation of tariff calculation passenger commercial air transport. The amount of the base rate and distance rates proposed by the Director-General to the Minister to set out the association of air transport companies. The purpose of the basic tariff and distance rates in order to attach the aircraft operating cost calculations, penyesuaina base rate or distance rates, and the results of the discussion with the air transport community. Generally, the rate is the base rate is often promoted, as most airlines impose tariffs terraced called subclassis rates starting from the lowest price to the highest. Base rate is a promotional rate that is often advertised by the airline, the more expensive the better the basic rate services and value added services obtained passengers. Component of the government’s tax rate for domestic flights is worth 10% of the base rate, insurance rates IWJR, Fuel Surcharge rates are at the discretion of the airline additional tariffs vary according to the value of existing routes.

With the state of the facts, we see vigorous airline fare wars, and we are not going to pay as the airline advertised but there is another additional cost components that must also we pay. Examples of such fare as:

Rates promo Lion Air to route (CGK-DPS) is $ 400,000, then most likely the ticket price to be paid = base rate + VAT + insurance + rates FS with taxable USD 250,000 = USD 400,000 + USD 40 000 + 6000 + USD 250,000 = USD 696,000

Therefore, before we buy tickets, should be observed from the first component of the added costs that are often not included in advertisements or print media or online. We as passengers do not get fooled or trapped by the low rates offered by airlines. Because it is so detrimental course disappointing, not price tickets really cheap as we imagine.

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