Ministry Reveals Cost Components to Lower Airfares

Jakarta, VIVA – The government plans to reduce domestic flight ticket prices by up to 10 percent during the Christmas and New Year (Nataru) period of 2024-2025.

Spokesperson for the Ministry of Transportation, Elba Damhuri, explained that the ministry will collaborate with various stakeholders to accommodate the ticket price reduction without cutting Value Added Tax (VAT).

These stakeholders include airlines, Angkasa Pura Indonesia, Pertamina, and AirNav, aiming to lower several cost components related to airfare.

"For instance, we will adjust the fuel surcharge, PJP2U (Passenger Service Charges), and jet fuel prices at several airports," Damhuri said in a statement on Wednesday (Nov 27).

Damhuri confirmed that the Pertamina Group will support the effort by reducing jet fuel prices during the 2024-2025 Nataru period across 19 airport locations.

These include airports in Denpasar, Surabaya, Medan, Silangit, Lombok, Labuan Bajo, Manado, Yogyakarta Kulon Progo, Pontianak, Ambon, Makassar, Balikpapan, Kupang, Sorong, Timika, Jayapura, Maumere, Nabire, and Biak.

Additionally, Pertamina Group will also support the initiative by lowering jet fuel prices by 7.5–10 percent.

"After the price reduction, jet fuel prices will be closer to the rates at Soekarno-Hatta Airport (CGK). Any increase in jet fuel prices in December 2024 will not affect airlines serving the public," he remarked.

As for airport service fees, Angkasa Pura Indonesia and all airport operation units (UPBU) under the Ministry of Transportation will reduce PJP2U fees by 50 percent and PJP4U fees by 50 percent.

However, Angkasa Pura Indonesia still requires confirmation from the Ministry of State-Owned Enterprises (BUMN) to include CGK and DPS airports in this initiative.

Airlines have agreed to offer an 8 percent discount on jet fuel surcharges, reducing it to 2 percent, and a 5 percent discount on propeller surcharges, reducing it to 20 percent.

"Meanwhile, AirNav will provide advanced and extended services during the Christmas and New Year period to support extended operating hours as needed by airlines," Damhuri stated.

Based on analysis and calculations by the Ministry of Transportation, all these cost reductions, along with considerations of routes and flight volumes for each airline, will result in a weighted average ticket price reduction of around 10 percent.

"The analysis and calculation of ticket price reductions do not yet include VAT incentives, as this falls under the authority of the Ministry of Finance," he concluded.