Rupiah Weakens and Jet Fuel Prices Rise, INACA Requests Revision of Airline Fares
The Indonesian National Air Carriers Association (INACA) has requested that the government adjust airline fare policies following the increase in avtur prices and the weakening of the rupiah against the US dollar, which are pressuring airline operating costs. INACA Chairman Denon Prawiraatmadja stated that this situation requires a response through more flexible fare policies.
“Aviation fuel (avtur) prices from Pertamina rose again as of 1 May 2026, for example at Soekarno-Hatta Airport for the period 1-31 May 2026 at Rp27,358 per litre, up 16 percent from the 1-30 April 2026 period at Rp23,551 per litre,” said Denon on Tuesday (5/5/2026).
Denon also highlighted the rupiah exchange rate against the US dollar reaching Rp17,425 per dollar on 4 May 2026, or up 2.5 percent from 1 April 2025 at Rp17,017 per dollar. In addition to the exchange rate factor, geopolitical conflicts in the Middle East are seen as adding further pressure to both the global and domestic aviation industry.
“Based on this, INACA requests the government and the Ministry of Transportation to make flexible adjustments to the fuel surcharge,” said Denon.
INACA proposes that fuel surcharge adjustments no longer follow the 60-day evaluation period as stipulated in Ministry Regulation 83 of 2026. The airline organisation requests adjustments to follow the movements in avtur prices announced by Pertamina.
Additionally, INACA asks the government to reconsider the postponement of discussions on revising the Upper Fare Limit (TBA) for domestic economy class flights.
“Immediately conduct discussions on revising the Upper Fare Limit (TBA) for domestic route economy class flights in a flexible manner following the rise in avtur prices and the increase in the dollar exchange rate against the rupiah,” said Denon.
INACA also encourages the Directorate General of Civil Aviation of the Ministry of Transportation to enhance coordination with the Ministry of Industry and the Ministry of Finance, including accelerating the policy of zero percent import duties for aircraft spare parts.
According to Denon, these proposals are put forward because the financial condition of airlines is once again under pressure due to rising avtur prices and the weakening rupiah, which could potentially affect air connectivity as well as related economic sectors.
“The request to the government is made considering the financial condition of airlines that is once again under pressure due to the increase in avtur prices and the dollar exchange rate, which could disrupt air transport connectivity, aviation-related sectors, and the national economy,” said Denon.