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Govt allows higher airfares in response to fuel price hike
The Transportation Ministry has allowed airlines to hike ticket fares to cover higher aviation fuel costs following a surge in global oil prices.
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Garuda Maintenance Facility (GMF) AeroAsia workers clean a Garuda Indonesia Boeing 737-800 NG plane at Soekarno-Hatta International Airport near Jakarta on Jan. 21. (Reuters/Willy Kurniawan)
T
he Transportation Ministry has allowed airlines to hike airfares to cover higher aviation fuel costs following a surge in global oil prices.
The decision, introduced through Transportation Ministerial Decree No. 68/2022 on fuel surcharges for domestic economy class flights, is to take effect on Monday and be reviewed every three months.
Under the decree, airlines are allowed to exceed the usual price caps on airfares by up to 10 percent for jets and 20 percent for propeller planes.
“If the surge [in oil price] affects airlines’ operational costs by 10 percent or more, the government allows airlines to impose an additional fee, or fuel surcharge, [to be passed on to consumers]. Other countries, like the Philippines, have implemented similar rules,” Transportation Ministry spokeswoman Adita Irawati said in a statement on Tuesday.
Read also: Global oil shock reaches Indonesia
Brent, the international oil price benchmark, exceeded US$120 per barrel in early March but has retreated somewhat since to hover around $110 per barrel in mid-April, Business Insider data show.
The price of aviation fuel at Indonesia’s three busiest airports, Soekarno-Hatta International in Banten, Ngurah Rai in Bali and Juanda in Surabaya, East Java, was up more than 60 percent year-on-year during the first two weeks of April, according to data from state-owned oil giant Pertamina.
