T

he Indonesian National Air Carriers Association (INACA) has asked the government to increase the ceiling price of airfares for scheduled flights immediately to help its members cope with increasing fuel prices and inflation.

INACA chairman and national flag carrier Garuda Indonesia president director Emirsyah Satar said the association would soon send their airfare review request to the Transportation Ministry.

“We need to review some cost components that affect airfares such as inflation rates and fuel prices and we intend to discuss the matter with the air transportation director general,” Emirsyah said in Jakarta on Wednesday night during the INACA Annual General Meeting.

The ceiling price needs to rise because the rupiah/US dollar rate is approaching Rp 10,000.

Additionally, the Indonesian provincial minimum wage in has increased by an average of 13 percent.

“The price of avtur [aviation fuel] reached Rp 10,000 quite some time ago, though the increase has not been sustained through three consecutive months. The time is right to review the ceiling price,” association secretary-general Tengku Burhanuddin added.

The ceiling price that pertains today is based on calculations from three years ago.

According to Transportation Ministry regulation No. 26/2010 on the ceiling price mechanism for scheduled flights, for instance, the maximum price for the Jakarta-Denpasar route is Rp 1.48 million (US$155), Jakarta–Makassar Rp 1.85 million, and Jakarta–Padang Rp 1.43 million. The price excludes 10 percent value-added tax, insurance and passenger service charge or airport tax.

Full-service ca rriers are allowed to charge up to 100 percent of the ceiling price, while medium- and low-cost players are allowed to charge up to 90 percent and 85 percent, respectively.

Transportation Ministry’s air transportation director general Herry Bhakti Gumay said the government was open to discussions on the matter with INACA.

Crude oil prices have continued to increase since they broke through $100 per barrel early this year. Brent crude rose to $126.62 per barrel in March, its highest level since the fourth quarter of 2008. Brent crude was trading at $108.19 in London on Thursday, a 0.12 percent increase from Wednesday.