Main Causes of High Airfares Revealed, Not Just Avtur
The Ministry of Transportation has revealed that persistently high airfares are not entirely influenced by the increase in avtur prices. The limited number of operational aircraft and the weakening rupiah exchange rate remain other factors pressuring airline operational costs.
Director General of Civil Aviation at the Ministry of Transportation, Lukman F. Laisa, stated that the national flight fleet condition has not yet fully recovered to pre-Covid-19 pandemic levels. As a result, airline carrying capacity has been unable to meet demand on several routes.
“Currently, if we compare with before the pandemic, the number of aircraft was almost 600. We do have 563 aircraft, but only 388 are serviceable at the moment,” Lukman said during a hearing with Commission V of the Indonesian House of Representatives on Thursday.
The limited fleet means the balance between supply and demand has not returned to normal. On the other hand, airlines are also facing cost pressures due to exchange rate fluctuations and rising avtur prices, narrowing the room to keep fare increases in check.
“Indeed, these expensive tickets may be related to the number of aircraft. Then, when there is a significant exchange rate difference and also a significant avtur increase, it becomes difficult for airlines not to raise fares,” he said.
Nevertheless, the government claims it continues to seek solutions to keep flight fares affordable. One step being taken is evaluating the upper fare limit provisions together with various stakeholders before they are implemented in new regulations.
“This upper fare limit has been evaluated, discussed with YLKI, INACA, the Coordinating Minister, and has even received approval from the President. We are currently processing changes to Ministerial Regulation 20 and Ministerial Decree 106,” Lukman said.
The government hopes the policy can provide a balance between the sustainability of airline businesses and the public’s ability to purchase airfares.
“Even if we raise it, with all the efforts made by airlines, it is not certain that the public will want to fly,” he said.