Flight tariff war

Flight tariff war

A flight tariff war can be seen on several domestic flight routes today, especially the Jakarta to Surabaya journey. Airlines serving that route, including Garuda Indonesia, Indonesia Airlines and Star Airlines, have implemented tariff strategies to attract passengers.

Indonesia Airlines has kept its airfare at below Rp 400,000 per seat and offered a special package. The company provides an extra ticket for every two tickets purchased. Star Airlines has lowered its airfare to Rp 484,000 per seat and Garuda Indonesia has reduced its fare to Rp 499,000 per seat, below the normal Rp 670,000 price.

The low tariff strategy is perhaps very attractive because in the current gloomy economic conditions, tariffs feature in consumers' considerations in choosing transport services. Therefore, we believe that the tariff war will expand to all other flight routes.

It is very difficult to change the conservative taste of consumers, who favor lower fares. So an increase in the flight tariff can have a boomerang effect. Consumers will choose alternative services that are competitive. In view of that phenomenon, the tariff war can have an adverse impact on the survival of air transport companies.

-- Neraca, Jakarta