Soaring Airfare Not What Industry Expects: Airline Association INACA
19 August 2022 15:34 WIB
TEMPO.CO, Jakarta - The Indonesia National Air Carrier Association (INACA) chairperson Denon Prawiraatmadja on Friday said the recent trend of soaring airfare does not significantly affect an airline’s profitability. He claimed that the increased prices were needed to adjust to the rising prices of jet fuel of avtur.
"The airline's profit is tiny so they can survive. The high ticket price is not what airlines expect," Denon said to Tempo on Friday, August 19.
Airline ticket prices have soared since the 2022 Eid al-Fitr national holiday. The increase in airfares occurred across all routes, both domestic and international, and was evenly distributed in all classes.
Denon explained various reasons for the high price of flight tickets. In addition to aviation fuel, fluctuations in the rupiah exchange rate against the US dollar make airlines bear higher operating costs. He said that this was because fluctuations in the exchange rate would affect the cost of renting the aircraft from the lessors.
"Airline tickets comprise 60 percent of leasing and aviation fuel [expenses]," said Denon.
In addition, the scarcity of available aircraft also causes ticket prices to soar. During the Covid-19 pandemic, many airline-owned aircraft were returned to lessors due to not operating. A number of planes were also grounded. These previously inoperative aircraft need to be re-maintained.
Denon ensured that airlines will support the government to stabilize flight ticket prices. The increase in airfares that occurred some time ago was considered to have an effect on the seat load factor or airline occupancy rate.
FRANSISCA CHRISTY ROSANA
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