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ransportation Minister EE Mangindaan said on Thursday that the ministry was set to increase the airfare price ceiling for scheduled flight tickets before his term ended on Oct. 20.

'€œBased on our calculations, we need to increase the price ceiling because airlines have been struggling to earn profits,'€ Mangindaan said on the sidelines of Garuda Indonesia'€™s From One Dollar to Billion Dollars Company book launch. '€œWe will raise it if we receive no complaint from the public,'€ he continued.

The Indonesian National Air Carriers Association (INACA) had demanded the government stop applying the price ceiling mechanism on busy routes as fares would still remain low because of tight competition.

National flag carrier Garuda Indonesia president director Emirsyah Satar echoed INACA'€™s statement saying that the price ceiling should only be applied to new routes as the industry was facing declining revenues caused by higher fuel prices and the depreciation of the rupiah against the US dollar.

'€œWe no longer consider flight services a luxury these days because of the public'€™s interest in using the service. Therefore, we will focus on ensuring the services will remain available for the public,'€ Mangindaan said, adding that the incoming government'€™s plan to increase fuel prices had also been taken into consideration.

Transportation Ministerial Regulation No. 26/2010 on the price ceiling mechanism for scheduled flight services stated that the maximum price for a Jakarta-Surabaya (East Java) flight was Rp 1.2 million, Jakarta-Makassar (South Sulawesi), Rp 1.85 million, Jakarta-Medan (North Sumatra), Rp 1.84 million, Denpasar (Bali)-Sorong (West Papua) is Rp 2.14 million and Medan-Surabaya is Rp 2.36 million.

The price excludes the 10 percent value-added tax, insurance and passenger service charges or airport taxes.

Full-service carriers such as Garuda Indonesia and Batik Air are allowed to charge up to 100 percent of the price ceiling, while medium- and low-budget players can only charge up to 90 percent and 85 percent, respectively.

According to Mangindaan, the ministry will immediately conduct a public survey to garner the public'€™s response to the plan because most airline passengers fly on low-cost carriers and are more vulnerable to price shocks.

Earlier this year, the ministry issued a tariff surcharge policy for domestic flights responding to demands from airlines facing an increasing avtur (aviation turbine fuel) price and the depreciation of the rupiah against the US greenback.