Transport Minister confirms airline ticket price cap will be discussed soon amid geopolitical impact

Jakarta — The Minister of Transportation, Dudy Purwagandhi, confirmed that discussions on the upper price cap (TBA) for airline tickets would be conducted with airlines and other stakeholders in response to the global geopolitical impact on operating costs in aviation. In the short term, the government will first formulate adjustments to the fuel surcharge in response to the rise in avtur prices (aviation turbine fuel), which affects the operating costs of airlines. ‘Next we will talk about the TBA (airline tickets),’ the minister said after attending a working meeting with Commission V of the Indonesian House of Representatives (DPR RI) in Jakarta, on Thursday. He made the remarks when asked to confirm statements by Coordinating Minister for Infrastructure and Regional Development (Menko IPW) Agus Harimurti Yudhoyono (AHY), who said he would discuss with the Ministry of Transportation regarding airline ticket prices as influenced by global geopolitics. Dudy said that, to date, there has been no special meeting with the Menko IPW to discuss TBA policies in more detail. ‘We have not met with the Menko yet. But in the short term, we are formulating the fuel surcharge; its adjustment to the rise in avtur. For the TBA we will talk with the airlines and also with other stakeholders, including with Kemenko Infra,’ he said. According to him, discussions with the airlines regarding adjusting the fuel surcharge have taken place and reached agreement because it is deemed an urgent need for the industry to adapt to higher fuel costs. After the fuel surcharge policy is implemented, the government will continue the discussion on the upper price cap involving the airlines, the Ministry of Transportation, and the Coordinating Ministry for Infrastructure and other relevant parties. ‘We had actually already discussed that. In the short term, the airlines have agreed that for the fuel surcharge this is what they most need so they can adapt to the rise in avtur prices,’ he explained. The Transport Minister stressed that there is potential for discussing the upper price cap in the future, focusing on the possibility of raising the cap to ensure the sustainability of the national air service. ‘Oh yes (there is potential for discussing the airline ticket TBA) certainly, certainly. Not lowering the TBA, but increasing its ceiling,’ said Dudy. Coordinating Minister for Infrastructure and Regional Development AHY confirmed that adjustments to the upper price cap (TBA) for airline tickets will be made in a measured manner, considering public conditions and the rise in global energy prices driven by the Middle East conflict. ‘It is not always easy to face world dynamics like this, but hopefully there will be an improvement and, at the same time, the price of airline tickets will not unduly burden the public,’ AHY said in Jakarta on Sunday (17/5). He said that global conflict and tensions directly impact global energy prices, which in turn affect operating costs in the aviation sector and the overall national air service. The government understands public concerns about potential increases in air ticket prices ahead of school holidays and the Eid al-Adha 1447 Hijriah celebrations, which usually boost domestic travel. As the coordinating minister overseeing the Ministry of Transport, AHY said the government continues discussions with the Ministry of Transport on various policy options to ensure ticket price adjustments remain within reasonable and measured bounds. The government is also coordinating with airlines operating in Indonesia to find the best solutions to cope with rising operating costs due to increases in global energy prices at present. AHY hopes that global geopolitical conditions, especially the conflict in the Middle East region, will improve soon so that pressure on the world energy markets and the aviation sector can gradually ease.