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The never-ending high airfares on Indonesian domestic routes
Healthy competition forces airlines to innovate; business models are developing, ranging from selling extra legroom, hotel rooms, car rentals, and developing super apps.
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Passengers arrive at Pattimura International Airport on the TransNusa Airlines inaugural Sorong-Ambon flight in Ambon, Maluku, on April 18, 2024. The Sorong-Ambon flight uses COMAC ARJ21-799 aircraft and is part of TransNusa's route expansion in eastern Indonesia. (Antara/Pattimura International Airport)
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oordinating Maritime and Investment Minister Luhut Pandjaitan said recently that domestic flights in the country are currently in trouble because of the unusually high ticket prices, highlighting the cost per block hour (CBH) as an operational cost component.
According to Luhut, domestic air fares in Indonesia are the second most expensive in the world after Brazil and are much higher than other ASEAN and highly populated countries.
The phenomenon of skyrocketing air fares is a recurring one. Around five years ago, the people of Aceh flocked to make passports because overseas plane tickets were cheaper than domestic ones. There was also the controversy whereby officials in Riau preferred to fly via Kuala Lumpur or Singapore on the way to Jakarta because of the higher domestic air fares.
The majority of domestic layovers are still centered on Jakarta’s Soekarno-Hatta International Airport or at least on Java Island. As a result, several domestic flights are equal to two end-to-end ticket prices: the departure place to Jakarta, and then from Jakarta to the end destination. When it is a roundtrip then the calculation must be doubled.
Transportation Ministry Regulation No. 39/2019 has been designed to create equal air transportation access, containing a hub and spoke concept. Transportation Ministry Regulation No. 31/2024 on April 2 reduced the number of international airports to 17 in an effort to help national airline companies recover.
Unfortunately, the implementation of the hub and spoke concept is not yet optimized since the airlines must take into consideration the commercial aspects of the routes they provide. Several airports, such as Sultan Hasanuddin Airport in South Sulawesi and Sultan Aji Muhammad Sulaiman Sepinggan Airport in East Kalimantan, have tried to expand domestic services.
However, further efforts are needed both in supporting the routes and flight frequency in those 17 international airports so that the hub and spoke concept may finally reach equilibrium.
