Airfares adjusted to new rupiah rate

JAKARTA (JP): The Indonesian National Air Carriers Association (INACA) will introduce new airfares later this month based on the rupiah rate of 3,000 to the U.S. dollar.

An executive of the association, Indra Setiawan, said the country's airlines would adjust fares to the rupiah's depreciation against the dollar in the third week of this month.

"This is not fare hikes, just adjustments to the rupiah rate against the U.S. dollar. We hope the Minister of Transportation Haryanto Dhanutirto will soon discuss this matter. INACA will then announce the adjustment," said Setiawan, also a director of the state-owned airline Merpati Nusantara.

The rupiah rate of 3,000 to the dollar had originally been set last week, Indra said as quoted by Bisnis Indonesia yesterday.

INACA's chairman, Soelarto Hadisumarto, asked the government to raise domestic airfares to offset the rupiah's fall against the U.S. dollar. The association will raise the airfares based on a decree of the minister of transportation.

Under decree No. 20/1996, dated April 3, 1996 and signed by Minister of Transportation Haryanto Dhanutirto, airfares should be adjusted every six months to the rupiah rate against the U.S. dollar.

The government did not increase airfares last May, the start of the current six-month period.

Current domestic airfares are set at an average of 11 U.S. cents per seat per kilometer.

Minister Haryanto said last week the government would approve the rate adjustment.

There are six scheduled air carriers in Indonesia: Garuda Indonesia, Merpati Nusantara, Sempati Air, Bouraq Airlines, Mandala Airlines and Dirgantara Air.

INACA's secretary-general, Benny Rungkat, said the airlines, which receive revenues in rupiah, are facing problems because most of their cost components are in dollars. About 70 percent of the airlines's costs are in dollars, he added.

Hotel

Meanwhile, director of sales and marketing of Horison Hotel Jakarta, Abdul Kohar, said the Indonesian Hotel and Restaurant Association could also periodically adjust their room rates to the rupiah rate against the U.S. dollar.

Star-rated hotels in Indonesia always set their room rates in U.S. dollars, but payments are allowed in rupiah.

"Star-rated hotels have so far applied various rates. It will be better if there is an approved, uniform rate of the rupiah against the U.S. dollar," Kohar said here yesterday.

But Hotel Millennium Sirih Jakarta's financial controller, Patrick Tan, said it would be better if hotels set their own rates. (icn)