Thursday, 12 December 2019

Coordinating Minister Demand Reduction on Plane Ticket Price



Mahinda Arkiyasa

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  • TEMPO.CO, Jakarta - Coordinating Minister for Economic Affairs Darmin Nasution requested Transportation Minister Budi Karya Sumadi to not delay in issuing a regulation on the reduction of plane tickets fare upper limit as Edi Al-Fitr draws close.

    "We requested not to delay because the Transportation Minister will amend the regulation on the upper limit. Hopefully it can be finished in one or two days, [the Minister] even requested three days. Just two days, Eid Al-Fitr is closing," Darmin said on Monday, May 13, 2019.

    With the regulations, airlines are expected to take steps to adjust ticket prices. Darmin added that he will communicate with the State-Owned Enterprise Minister in relation to the issue.

    The government officially determined the upper limit for plane ticket prices in a range of 12 to 16 percent. The 12 percent reduction will be applied to primary routes within the Java region. Meanwhile, other rates of reduction will be applied for routes outside of Java, such as flights to Jayapura.

    Based on Darmin's request, Minister Budi Karya Sumadi said that he will immediately disseminate the information to relevant stakeholders. Budi also said that he will try to finish the regulation quickly. "If the regulation is signed on May 15, hopefully on May 16 it will already has effects," Budi said.

    In relation to the reduction, Budi said that he had considered a number of components in determining airline tariffs. Therefore, he believed that the policy will not affect the airline's financial condition. "The number has considered [financial] security of airlines," Budi explained.

    According to Budi, one of the conditions that will support the tariff reduction is the reduction of jet fuel price. In addition, Budi also mentioned flight occupancy and time punctuality affect the airline’s ticket price.