High Airfares Trigger Inflation, BPS: School Holiday Effect

The Central Statistics Agency (BPS) has recorded that airfares continued to climb into June 2026, driven by high demand, particularly during the school holiday period.

In June 2026, inflationary pressure on air transport tariffs penetrated the 6.11% level, continuing an upward trend since May 2026.

“The increase in air transport fares was driven by rising demand in line with the school holiday period,” said Ateng Hartono, BPS Deputy for Distribution and Services Statistics, during a press conference at BPS Headquarters in Jakarta on Wednesday (1/7/2026).

Referring to the price components, there were actually mitigating factors for inflationary pressure, such as a decrease in avtur prices and a government-borne value-added tax (VAT) discount.

PT Pertamina Patra Niaga officially lowered domestic avtur fuel prices starting 1 June 2026. This price adjustment applies at airports across Indonesia, with the reduction reaching approximately 10%, following a recent weakening trend in global energy prices.

Meanwhile, the government’s airfare incentive was officially established by Finance Minister Purbaya Yudhi Sadewa after issuing Minister of Finance Regulation (PMK) Number 43 of 2026 concerning VAT on air tickets borne by the government for the 2026 school holiday period.

Under the regulation, enacted by Purbaya on 22 June 2026, the government bears 100% of the VAT on scheduled domestic economy class commercial air transport services. The regulation stipulates that the government-borne VAT is granted to service recipients for ticket purchases made from 22 June 2026 to 5 July 2026, for flights taken from 24 June 2026 to 5 July 2026.