Thursday, 20 Sya'ban 1440 / 25 April 2019

Thursday, 20 Sya'ban 1440 / 25 April 2019

Govt to lower domestic airfares this week

Kamis 14 Feb 2019 06:30 WIB

Rep: Sapto Andika Candra, Idealisa Masyrafina/ Red: Reiny Dwinanda

Transportation Minister Budi Karya Sumadi

Transportation Minister Budi Karya Sumadi

Foto: Republika/Dadang Kurnia
Govt says airfares hike must not more than 20 percent.

REPUBLIKA.CO.ID, JAKARTA -- The government is still trying to lower the price of domestic airline tickets against the current selling price. The new tariff will be cheaper than the price offered by airlines since the beginning of the year, Minister of Transportation Budi Karya Sumadi said.

According to the minister, President Joko Widodo (Jokowi) paid great attention to the matter. Jokowi expected the public would not be burdened with expensive airline tickets tariff, Budi said.

Baca Juga

"Yes, (it will be lowered) this week," Budi explained after meeting Jokowi at Merdeka Palace on Wednesday (Feb 13).

Budi claimed he did not know the details of the tariff reduction. However, although airlines have to increase ticket prices for business reasons, the figure was only 10 to 20 percent of the normal price of airline tickets in 2018.

Currently, the price of airline tickets has risen by an average of 40 percent compared to last year's prices. This number refers to data from the Indonesian Hotels and Restaurants Association (PHRI).

Republika.co.id tried to create airfare simulation. The normal price for airfares of Jakarta-Medan flight in 2018 was Rp 1 million per person. But as of the beginning of 2019, the price jumped to 40 percent, to Rp 1.4 million per person.

Assuming a 10-20 percent increase which mentioned by the Minister of Transportation, the fare will be Rp 1.2 million per person this week. Although this figure is still somewhat higher than the normal rate, the Minister said that the government can not further intervene the corporation.

"The increase will be around 10-20 percent. This is a corporation, we can not intervene further, so let them calculate it," Budi explained.

Budi said, avtur contributes a significant part of the ticket sales, which is 40 percent. In addition to avtur prices, the government is also exploring other gaps in reducing airfares.

The polemic over airplane and aviation fuel tariffs again heated up after PT Pertamina (Persero), as the sole seller of avtur fuel for domestic flights, was challenged to be able to accept other competitors entering the domestic market. The idea was conveyed by President Jokowi in response to the high price of domestic flight tickets due to the high price of avtur fuel sold by Pertamina.

President Jokowi heard complaints from hotel and culinary entrepreneurs who are members of PHRI who reported a decline in hotel occupancy rates up to 20-40 percent since the beginning of 2019.

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