Government approves increase in airfares

Government approves increase in airfares

JAKARTA (JP): The government has approved an airfare increase
of between 7 percent and 10 percent proposed by the Indonesian
National Air Carriers Association's (INACA) to offset the
rupiah's depreciation against the U.S. dollar.

Director General of Air Transportation Zainudin Sikado said
here yesterday that the new rates, however, would not change the
basic airfare of 11 U.S. cents per passenger per kilometer for
jets and 13 cents per passenger/kilometer for other planes.

"INACA has met with Minister of Transportation Haryanto
Dhanutirto, who gave the green light for the increase. But air
carriers were told to first inform the House of Representatives
and announce the new fares at least a week before their effective
date," Sikado said after a seminar held by the Trisakti
Transportation Management School.

He said that INACA had not yet scheduled any date for the
introduction of the new airfares.

INACA executives were unavailable for comment yesterday.

Under ministerial decree No. 20/1996, dated April 3, 1996,
signed by Minister Haryanto, airfares were increased.

Airfare hikes will be adjusted automatically every six months
in line with the rupiah's fluctuation against the dollar. The
government did not increase airfares in May, the beginning of the
current six-month period.

INACA has been considering raising domestic airfares to offset
the fall of the rupiah against the dollar since July.

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

The airlines, which receive most of their revenue in rupiah,
have been facing problems because most of their costs are in
dollars.

Sikado said yesterday that INACA was allowed to raise airfares
by a maximum 10 percent.

"The government has listened to the air carriers. But we are
still waiting for the details of jet and non-jet airfare
adjustments," he said.

He said the government had not yet set the rupiah rate against
the dollar.

"INACA is allowed to estimate the rate by itself, but if the
rate is too high, the government will intervene," he said. (icn)