Aviation Turbine Supply by Pertamina - Photo: Special

JAKARTA (TheInsiderStories) – Responding to public screams about soaring airline ticket prices since the beginning of 2019, the government promised to reduce the upper limit tariff by 15 percent, said a senior minister on Thursday (05/09). The reduction in the tariff limit will be consolidated with airline businessmen in the near future.

Maritime Coordinating Minister Luhut Binsar Pandjaitan said that although it had not been officially decided, the policy had entered the finalization process in the Ministry of Transportation. However, he stressed that at one time the decision could still be reevaluated if there were parties who still felt disadvantaged.

“Later we will learn more about the cycles and conditions of supply and demand, and how our markets develop after the tariffs are lowered,” he said in Jakarta.

The Minister acknowledged that the Ministry of Transportation itself had confirmed that the government had committed to hearing public complaints by urging the airline to reduce tariffs too high lately.

Furthermore, he requested that the public remain calm in the face of the high cost of airline tickets because this was the result of high aviation turbine (avtur) prices and fluctuations in the global economy that demanded that airlines take action to raise its airline fares.

Meanwhile, Coordinating Minister for Economic Affairs Darmin Nasution stressed that the tariff reduction would certainly be the government’s reaction to the cries of the people who wanted more affordable rates. According to him, the government has been mandated to take care of people’s problems and is not a problem that will be faced by the public.

“Those who have the authority to pay attention to the people and the airline are the government. So, that’s the job of the Ministry of Transportation. Next Monday the airline said it was ready to reduce it,” he said on Thursday (05/09).

Secretary General of the Ministry of Transportation Joko Sasono acknowledged that the government had heard the voice of the people and would review the problem comprehensively by involving all interested parties so as not to cause loss claims from the airline or the community itself.

However, he stressed, the government would continue to pay attention to the interests of the community in the problem.

“Until the time we will announce how the government agreed with the airline. Because of that, we ask the public also to be patient in waiting for government policies, which certainly will not harm consumers,” he said.

In an Indonesia Statistics report last week, it was seen that the transportation sector’s contribution to national GDP was very small, which was only 5.52 percent, or just up 0.13 percent from 5.39 in the fourth quarter of 2018. The dominant factor from the stagnant growth was the increase in plane tickets since January had triggered a decline the number of tourists, so that the performance of the tourism sector in the first quarter of 2019 declined.

President Joko Widodo in his reign has placed tourism as a priority sector, for example by nominating 10 national strategic tourism areas. In addition, the government has also boosted the construction of airports and ports to open access to new tourist areas.

However, the policy was not supported by the mentality of the transportation industry which tended to take advantage of tourism potential to reap profits by raising the standard of service and airline tickets and similar transportation.

The ticket increase policy itself has backfired the airline, where throughout January-March 2019, airlines with an airport axis under the management of PT Angkasa Pura II lost 4 million passengers. This condition automatically reduces the income of the airline concerned.

Two months ago, Lion Air has lowered its ticket after getting a warning from the government. But the consolidation and control of the government still weak so that airlines are free to set the ticket prices. Meanwhile, Garuda Indonesia has yet to confirm its tariff reduction policy.

Written by Daniel Deha, Email: daniel@theinsiderstories.com