The Jakarta Post
Sriwijaya Air plans to close some routes if the government revises down the ceiling prices of economy class tickets to force airlines to cut airfares.
Sriwijaya Air president director Joseph Saul said on Tuesday the airline “like it or not” had to abide by the government's decision, but he said the company needed to close a number of routes to prevent losses.
He said the government policy would negatively affect its revenue. “Of course, it will affect our revenue,” Joseph said as quoted by kontan.co.id.
On Monday, Coordinating Economic Minister Darmin Nasution invited Budi, State-Owned Enterprises (SOE) Minister Rini Soemarno and flag carrier Garuda Indonesia’s board of directors for a meeting in Jakarta to lower the prices of plane tickets.
“We have one week to decide on new price ceilings for economy class tickets. God willing, [we will issue a new policy],” Budi said.
Joseph stressed closing several routes was necessary to maintain the company’s financial health. He said the airline would monitor the domestic flight market and consider opening new, more profitable routes.
The decision to revise down ceiling prices of airfares came after two regulations -- Transportation Ministerial Regulation No. 20/2019 on airfares for domestic commercial airlines and Ministerial Decree No. 72/2019 on airfare ceilings – failed to push down airfares.
Budi emphasized the policy was made after considering the people’s purchasing power. (bbn)