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View all search resultsJet fuel prices ease but cost pressure persists for airlines
Airfares are unlikely to fall significantly despite lower aviation fuel prices this month as airlines continue to grapple with high operating costs and fuel surcharges well above pre-pandemic levels.
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A worker pulls a hose after refueling a commercial aircraft with aviation fuel on April 7, 2026, at Terminal 1C of Soekarno-Hatta International Airport in Tangerang, Banten. (Antara/Muhammad Iqbal)
T
he average price of jet fuel (avtur) at Indonesia's five main airports declined for a third consecutive month in August, reducing the maximum fuel surcharge for scheduled domestic airlines to 30 percent of the upper fare limit.
However, the decline has done little to ease ticket prices, as fuel costs remain far above the levels used to calculate Indonesia's airfare cap.
The Indonesian Aviation Service Users Association (APJAPI) said prospects for further reductions in fuel surcharges would largely depend on global oil prices, which remained vulnerable to geopolitical tensions.
"As long as the United States and Israel continue disrupting Iran, Lebanon and Gaza, global oil prices will hardly return to normal at below US$70 per barrel," APJAPI chairman Alvin Lie said, as reported by Bisnis.com on Monday.
"The increase in avtur prices is choking airlines' finances. And this is not only happening in Indonesia. Singapore Airlines and AirAsia have suffered losses too. The same goes for airlines in Europe and the US. As a result, many routes have been closed or their frequencies reduced," he said.
The rupiah's weakness has added to airlines' cost pressures, as many operating expenses are denominated in US dollars or euros, prompting carriers to prioritize international routes that are exempt from domestic fare caps and generate revenue in dollars.
The industry is set to face fresh cost pressure next year when airlines are required to include 1 percent sustainable aviation fuel (SAF) in their overall fuel use, which currently costs three to four times as much as conventional jet fuel.
