Ministry allows airlines to revise rates as fuel prices soar

Miscellaneous

– The Ministry of Transportation has allowed airlines to adjust ticket prices, including by adding fuel surcharges, following an increase in oil and jet fuel prices.

“This provision (allowing airlines to revise ticket prices) was made after coordinating with relevant stakeholders such as airlines, aviation associations, aviation practitioners, YLKI (the Indonesian Consumers Foundation), and other related aviation experts,” Transportation Ministry spokesperson Adita Irawati informed here on Tuesday.

She said the provision was put in place to maintain the sustainability of airline operations and ensure that connectivity between Indonesian regions is not disrupted.

This provision is stated in Ministerial Decree No. 68 of 2022 concerning Additional Costs for Economy Class Fares of Scheduled Domestic Commercial Air Transport Services, which came into force on April 18, 2022.

Irawati explained that the increase in global jet fuel prices has greatly affected the cost of flight operations.

According to her, if the price increases and affects flight operation costs by up to 10 percent or more, then the government can allow airlines to set additional costs, such as fuel surcharges.

“This provision has also been applied in other countries, one of which is the Philippines,” she said.

However, the provision is non-binding, she added, meaning, airlines can choose to apply the additional costs in the form of fuel surcharges or not.

The provision will be evaluated every three months, or upon significant changes in flight operation costs, she explained.

“Supervision will be carried out by the Ministry of Transportation through the Directorate General of Air Transportation, and will be evaluated in accordance with the dynamics of world prices,” she said.

Jet aircraft can now apply a maximum of 10 percent of the upper tariff limit, according to each air transport enterprise. Meanwhile, propeller aircraft can apply a maximum of 20 percent of the tariff limit.

Source: Antara News