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)