INACA wants government to hike domestic airfares

JAKARTA (JP): The Indonesian National Air Carriers Association (INACA) wants the government to raise domestic economy airfares gradually, and in real terms, not just to adjust fares to the rupiah's depreciation against the U.S. dollar.

INACA's secretary-general, Benny Rungkat, said here yesterday that airfares in Indonesia were much lower than in other countries.

"With the current airfares, many airlines have problems maintaining their fleets," Rungkat said as quoted by Antara.

Economy airfares are set by the government.

Airfares are regularly adjusted every six months to rupiah rates against the U.S. dollar, based on ministerial decree No. 20/1996.

Minister of Transportation Haryanto Dhanutirto said last week that INACA might raise domestic airfares soon because of the recent rupiah drop against the dollar.

"The government has allowed INACA to raise airfares. One of its aims is to make airlines more financially able to add to and maintain their fleets," Rungkat said.

Current domestic airfares were set at an average of 11 U.S. cents per seat per kilometer, he said. "But with the 11 to 13 percent drop in the rupiah against the U.S. dollar, the real value of the current rate has dropped by 1.5 U.S. cents to 9.5 U.S. cents per seat per kilometer," he said.

Based on a report compiled by the International Civil Aviation Organization in 1991, in Africa, airfares are set at 27.5 U.S. cents per seat per kilometer (to a 25-km distance), 21.5 U.S. cents (500 km), 18.7 U.S. cents (1,000 km), 15.9 U.S. cents (2,000 km and 3,000 km).

In South America, airfares are 22 U.S. cents (to 250 km), 18.8 U.S. cents (500 km), 16.2 U.S. cents (1,000 km) and 12.7 U.S. cents (2,000 km and 3,000 km),

European airfares are 54 U.S. cents (to 250 km), 40.7 U.S. cents (500 km), 30.7 U.S. cents (1,000 km), and 23.2 U.S. cents (2,000 km and 3,000 km).

Airfares in the Asia-Pacific region are 25.5 U.S. cents (to 250 km), 20.3 U.S. cents (500 km), 20.1 U.S. cents (1,000 km) and 15.5 U.S. cents (2,000 km and 3,000 km).

"In Indonesia, according to ICAO, the airfares are 10.8 U.S. cents (to 250 km), 6.9 U.S. cents (500 km), 7.7 U.S. cents (1,000 km) and 8.8 U.S. cents (2,000 km and 3,000 km)," Rungkat said.

He said the low rates meant Indonesia's air carriers would always have difficulties allocating funds for fleet purchases. "Airfares are also too low to cover the high cost of aircraft maintenance."

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

Rungkat said that the airlines, which earned in rupiah, had frequent problems because most of their spending was done in dollars.

About 70 percent of the airlines's costs had to be repaid in dollars, he said.

"INACA will urge the government to raise domestic economy airfares gradually over a five year period, until the rates reach an average 16 U.S. cents per seat per kilometer."(icn)