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Airline fares cut to boost sales amid COVID-19 scare
Airfare discounts make up part of the Rp 298.5 billion (US$21 million) in government incentives allotted to airlines and travel agents to attract foreign tourists to Indonesia. The incentives will run from March to May.
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Passengers wearing masks board a plane at Hang Nadim Airport, Batam, on Feb. 4. (Antara/M Risyal Hidayat)
T
he general public is expected to see a drastic drop in airline ticket prices in March as the government prepares incentives to encourage tourism to and within the country amid the COVID-19 outbreak caused by the novel coronavirus.
A document issued by the Transportation Ministry and obtained by The Jakarta Post on Tuesday shows that airfares will fall by 40 to 50 percent on routes to 10 destinations deemed most affected by the outbreak.
The 10 destinations will include Yogyakarta; Malang, East Java; Manado, North Sulawesi; Bali; Mandalika, West Nusa Tenggara; Labuan Bajo, East Nusa Tenggara; Bangka Belitung province; Batam and Bintan of the Riau Islands; and all regencies around North Sumatra’s Lake Toba.
“The government is very concerned about this matter. [It will] issue important policies to save the tourism industry, which can benefit locals who work in the industry,” Tourism and Creative Economy Minister Wishnutama Kusubandio said in a press statement on Tuesday.
Airfare discounts make up part of the Rp 298.5 billion (US$21 million) in government incentives, announced on Tuesday, allotted to airlines and travel agents to attract foreign tourists to Indonesia. The incentives will run from March to May.
The government hopes to buoy the sinking tourist industry as would-be visitors cancel their vacation plans in the country over fears of the deadly COVID-19 outbreak. The Indonesian Hotel and Restaurant Association (PHRI) has reported 40,000 room and 20,000 visitor cancellations in Bali since the outbreak in early January.
The incentive is expected to attract about 736,000 tourists from foreign markets who have a high average spending level on vacation, Wishnutama said. One of the markets highlighted was Australia, whose tourists spend an average of US$1,800 per arrival in Indonesia. Another was the Middle East, whose tourists spent $2,200 on average.
The minister added that the expected increase in tourism would contribute about Rp 13 trillion to Indonesia’s economy.
Authorities will allocate a separate Rp 443.39 billion in discounts for domestic tourists to the 10 tourist destinations outlined in the program.
“In the future, the government will prepare other incentives that will follow the development of the coronavirus and its impacts on the economy in early or late April,” said Coordinating Economic Minister Airlangga Hartarto after a cabinet meeting on Tuesday.
