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Govt calls for affordable air tickets as it raises fuel surcharge cap
The government has made an upward adjustment to the fuel surcharge cap as the domestic aviation industry reels from a surge in global fuel prices and purchasing power remains low.
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Reporters mill around an Airbus A330-900 NEO aircraft bearing Garuda Indonesia livery during an event on Nov. 27, 2019 introducing the flag carrier’s new fleet at Soekarno Hatta International Airport in Tangerang, Banten. (JP/Dhoni Setiawan)
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omestic airlines are once again challenged avtur to find the middle ground in setting fair ticket prices, following the government’s latest regulation on aviation surcharges and a call to all local carriers to avoid imposing drastic fare hikes.
The new rule is stated in Transportation Ministerial Decree No. 142/2022 regulating fuel surcharges and economy-class fares for scheduled domestic flights.
After a series of evaluation, the ministry has capped the fuel surcharge for jet aircraft at 15 percent from 10 percent previously, while the fuel surcharge for propeller-powered aircraft has capped at 25 percent from previously 20 percent.
Responding to the new policy, Indonesia National Air Carriers Association (INACA) chairman Denon Prawiraatmadja said the government’s adjusted surcharge cap was in line with volatile global oil prices, which had also taken a toll on the price of jet fuel, also known in the industry as avtur (aviation turbine fuel).
Denon said prices could be adjusted by factoring in the flight frequency of each airline.
“Airlines with many frequent flights don’t have to raise passenger fares according to the upper ticket [price]. I think it’s a win-win solution for the aviation industry, so we can tackle the burden cost issue more easily,” he said on Sunday.
Denon noted that the adjusted surcharge cap could help the aviation ecosystem recover to pre-pandemic levels faster than projected.
