Thursday, 12 December 2019

Air Carriers Remain `Healthy` Despite Lowered Airfare Upper Cap



Petir Garda Bhwana

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  • TEMPO.CO, Jakarta - Transportation Minister Budi Karya Sumadi announced that he has thoroughly considered every element involved prior to lowering the upper-cap of airfares and guarantees that the policy will not negatively affect air carrier’s financial health.

    “The nominal has factored in airline carriers’ security, Insyallah (If God permits) they will continue to be 'healthy',” said Budi in a meeting at the Coordinating Ministry of Economic Affairs headquarters on Monday.

    One of the elements that helped convince the ministry to lower the upper cap fare is the decreasing prices of jet fuel (avtur). Other elements include flight occupancy and on time performances of air carriers and airport management that are relatively improving.

    Read: Gov't Officially Cut Airfare Top Limit by 12-16 Percent

    “Those elements combined are able to push for on-time flights either during takeoffs or landings, this lowers the use of human resources and jet fuel is less needed. This is important,” said Minister Budi.

    The government has lowered the upper cap tariff by 12-16 percent that heavily depends on a flight’s route, “This affects jet [engines] not propeller powered planes,” and will only be imposed on routes that are most popular with passengers such as in the Java region and flights to Jayapura.

    “We are hoping that it will be signed in two days and be effective,” said the Transportation Minister.