The Jakarta Post
After lowering fuel prices for land transportation, President Joko “Jokowi” Widodo will likely call on state-owned oil and gas holding company Pertamina to lower the price of aviation turbine fuel (avtur), which has been blamed for the high operational costs of airlines.
“I just heard from Pak [tycoon] Chairul Tanjung about avtur sold at Soekarno-Hatta International Airport, which is monopolized by Pertamina,” said Jokowi when speaking at an event to celebrate the Indonesian Hotel and Restaurant Association (PHRI) in Jakarta on Monday.
During the event, the President heard the complaints from tourism players about the low-occupation rate of hotels in a number of regions, which they said was because of the high prices of airplane tickets.
At the event, PHRI chairman Hariyadi Sukamdani complained to Jokowi that the price increase of airplane tickets of up to 40 percent had discouraged people from holidaying in other regions.
“The high prices of airplane tickets has reduced demand for travel. Hotel occupancy has declined by between 20 and 40 percent,” Hariyadi added as quoted by kompas.com.
Jokowi promised to discuss the issue with Pertamina. “I will summon the Pertamina president director,” Jokowi said, adding that the monopoly was the cause of the high avtur price.
Jokowi said he would give two options to Pertamina – lower the price or allow other companies to sell avtur.
The President said allowing other companies to sell avtur would help lower prices and encourage efficiency.
He said the avtur price in Indonesia was 30 percent higher than in neighboring countries, therefore the high price of avtur should be addressed to improve the competitiveness of the country’s airlines and tourist industry.
“It has impacted airline ticket prices because avtur contributes to 40 percent of [airline operational] cost,” he added. (bbn)