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View all search resultsAirlines push for higher fare cap as fuel costs rise, rupiah weakens
Avtur prices at Soekarno-Hatta International Airport in Jakarta rose to Rp 27,358 (US$1.57) per liter for May period, up 16 percent from Rp 23,551 per liter in April and more than doubling from Rp 13,656 in March.
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Prospective airplane passengers queue on Dec. 21, 2024, to enter Soekarno Hatta Airport Departure Terminal 1A in Tangerang, Banten. PT Angkasa Pura Indonesia (API) as manager of the airport, noted that the peak of the 2024 Christmas homecoming flow occurred from Dec. 20 to Dec. 22 of that year. (Antara Foto/Muhammad Iqbal)
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omestic airlines have urged the government to raise the ceiling on economy-class airfares, citing surging fuel costs and a weakening rupiah that are squeezing margins and threatening connectivity.
“Geopolitical tensions in the Middle East have yet to ease, continuing to affect the aviation industry both globally and domestically,” Denon Prawiraatmadja, chairman of the Indonesia National Air Carriers Association (INACA) said in a statement on Tuesday.
“We urge the government to reconsider the decision to delay discussions on the upper fare limit and to promptly begin revising the cap for domestic economy-class routes, with a more flexible mechanism that reflects increases in avtur [aviation turbine fuel] prices and the US dollar against the rupiah,” he added.
Read also: Airlines renew call to raise fare cap as jet fuel prices jump 70%
Avtur prices at Soekarno-Hatta International Airport in Jakarta rose to Rp 27,358 (US$1.57) per liter for May period, up 16 percent from Rp 23,551 per liter in April and more than doubling from Rp 13,656 in March.
Fuel typically accounts for 30 percent to 50 percent of an airline’s operating costs, making carriers highly sensitive to energy price swings.
Iran has been blocking nearly all shipping vessels in the Strait of Hormuz apart from its own for more than two months, with no signs of a deal to end the war, which has caused the biggest disruption ever to global energy supplies.
