Govt Provides Incentives for Airlines to Cut Ticket Prices



Petir Garda Bhwana

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  • TEMPO.CO, Jakarta - To reduce airplane ticket prices, Secretary of the Coordinating Ministry for Economic Affairs Susiwijono ensured that the government will provide incentives to airlines so they can lower airfares. Susiwijono said that the government is ready to issue the revised Government Regulation (PP) on said matter. 

    "The government is preparing it over the next day or two, because [the PDD] has been approved by the President," Susiwijono said in Jakarta, Wednesday, July 10.

    Susiwijono said the fiscal incentive is part of the government's efforts to cut airplane ticket prices, which have risen since October 2018. The high prices have affected the commercial aviation industry—reducing the number of air transport passengers even during the Eid homecoming season.

    This fiscal incentive will be provided for aircraft rental, maintenance and repair services, aircraft rental services from outside the customs area, as well as the import and delivery of aircraft and spare parts.

    Previously, the government said that 208 flights from low-cost carriers (LCC) will be mandated to discount ticket prices by up to 50 percent of the upper limit rate. The mandate takes effect today, July 11.

    The increase in airplane ticket prices has been a contributor to national inflation since November 2018. It has also reduced the number of air transport passengers by 28 percent, according to data from January to April.


    Read also: Airline Ticket Price; Government Intervenes Too Far: Ombudsman