The Indonesian government has formed a task force to address the
issue of high airfares in the country, with the goal of reducing
domestic flight prices by approximately 10% by October.
Tourism and Creative Economy Minister Sandiaga Salahuddin Uno
announced the initiative on Wednesday, 14 August 2024 stating that
efforts are being made to make air travel more affordable for
passengers.
The task force includes representatives from the Coordinating
Ministry for Economic Affairs, the Coordinating Ministry for Maritime
Affairs and Investment, and other relevant ministries and organisations.
The move comes as the Indonesian National Air Carriers Association
(INACA) reports that the country's aviation industry is currently
stagnating and incurring losses despite high ticket prices. INACA
President Denon Prawiraatmadja said, "Airlines are facing losses due to
the high flight costs, which have pushed up ticket prices."
Aviation observer Alvin Lie identified high tax burdens from both the
government and airports as a major factor contributing to expensive
airfares. Lie noted that ticket prices include costs for airport
operation and maintenance, as well as airport service fees. He also
pointed out that airfares are subject to an 11% VAT and a 0.25% fee for
aviation fuel on domestic flights.
Minister Sandiaga stated that these issues will be studied to ensure
that Indonesia's aviation industry operates efficiently, comparable to
those of other countries.