Jet Fuel Price Surge: Experts Predict Air Ticket Prices to Rise by Up to 35 Per Cent
Indonesia’s national aviation industry is currently facing a major challenge following the trend of rising aircraft fuel prices, or avtur, in the global market. Aviation experts predict that if this surge continues without policy intervention, air ticket prices at the consumer level could potentially increase significantly, reaching up to 35 per cent.
The increase in avtur prices is a crucial factor because fuel costs contribute the largest portion to airline operational costs, ranging from 30 to 40 per cent. This situation is exacerbated by fluctuations in the exchange rate of the Rupiah against the US dollar, given that avtur and aircraft spare parts transactions are conducted in foreign currency.
Public policy and aviation experts believe that airlines are currently in a difficult position. On the one hand, they must maintain affordable prices for the public, but on the other hand, profit margins are increasingly eroded by rising production costs.
“If avtur prices continue to rise consistently, then fare adjustments are an unavoidable step for airlines. Our prediction is that air ticket prices could increase by up to 35 per cent to cover rising operational costs,” said an expert in a statement.
Excessively high air ticket prices are feared to reduce public purchasing power and hinder the recovery of the national tourism sector.
The following is an estimate of the impact of rising cost components on air ticket prices based on current market analysis:
In anticipation of this potential surge, stakeholders are urging the government to immediately evaluate the Upper and Lower Fare Limit (TBA/TBB) regulations. Adjusting fuel surcharges is considered the most realistic short-term solution to maintain the sustainability of the aviation industry.
Currently, airline operators are still monitoring global crude oil prices and hoping for stability in the Rupiah exchange rate so that the pressure on air ticket prices is not too extreme for the wider community.
Many tourists are caught off guard by departure costs at the airport. See a list of countries with the highest ticket taxes and how to avoid ‘surprises’ when travelling.
Passengers are advised to regularly monitor the airline’s official channels to get the best prices and available promotions.
Member of Commission V of the DPR, Sofwan Dedy Ardyanto, encourages the government to improve the management of avtur and eliminate monopolies so that domestic air ticket prices are cheaper. See the solution!
The Ministry of Transportation will review the request for an increase in the upper fare limit (TBA) for domestic routes of up to 15 per cent.
The Minister of Transportation explained that the government is providing stimulus through various sectors, including bearing the costs of purchases, avtur, and other additional costs (surcharges).