Gov't Calls Air Carriers for Reasonable Airfare Increase

TEMPO.CO, Jakarta - Transportation Minister Budi Karya Sumadi expressed his comments on the recent increase of air fare, which is said to be related to the price of jet fuel.

The Minister explained that there are several elements used in calculating their air fare, namely: the price of jet fuel, airplane price, manpower, and inefficiency. Meanwhile, on the issue of the minimum and maximum limit of air fare, Minister Budi said that he had handed over the proposition to revise the minimum limit of airfare from 30 percent to 35 percent of the maximum limit.

Furthermore, Budi also encouraged air carriers to apply a reasonable increase of air fare if it is considered necessary.

"I think although we have a minimum and maximum limit, we requested for a policy from Garuda or other carriers to increase airfares based on the public's affordability," said Minister Budi Karya at the Transportation Ministry headquarters on Wednesday, February 13, 2019.

Previously, Minister Budi had also requested air carriers incorporated in the Indonesia National Air Carriers Association (INACA) to lower their air fares. In addition, Budi also permitted the Comission for the Supervision of Business Competition (KPPU) to conduct an investigation on the suspicion of cartel practice.

On the other hand, Director or Indonesian flag carrier Garuda Indonesia Ari Akhsara claimed that the carrier has reduced the air fare by 70 percent for certain routes. However, for other high demand routes, Ari said that the carrier cannot lower the air fare significantly due to high seat occupancy rate.

The increase had also triggered President Joko "Jokowi" Widodo to summon state-owned oil and gas company Pertamina to demand an explanation on the high jet fuel price compared to the neighboring countries.

ANTARA