Stabilize Airline Ticket Prices, These Are Three Efforts Made By The Ministry Of Transportation

JAKARTA - The Ministry of Transportation has intensively and consistently made various efforts to stabilize airline ticket prices so as not to cause high inflation as directed by President Joko Widodo (Jokowi).

There are three efforts that have been made, starting from asking airlines for efficiency to encouraging the involvement of local governments (local governments).

Minister of Transportation Budi Karya Sumadi said that his party continues to improve coordination and collaboration with stakeholders, namely the Ministry of Finance, Ministry of SOEs, local governments, flight operators, and other related parties.

Budi also revealed that there were three main efforts made.

First, the Ministry of Transportation has asked airlines to make efficiency and innovation efforts to manage flight ticket prices more affordable.

"Doing efficiency, providing discounts and cheaper rates at certain times, and other innovations," said Budi Karya Sumadi in an official statement, Sunday, August 21.

Second, said Budi Karya, efforts between local governments and airlines to maximize passenger occupancy at certain times.

On weekdays, for example on Wednesdays at noon, usually the average occupancy is only 50 percent.

"Airlines must promote discounts or lower prices due to low demand. People can take advantage of this time to get cheaper tickets. So that the passenger occupancy rate will increase and ticket prices are stable, and cumulatively the airline's income will increase and will provide space for does not impose an upper limit rate at peak times," he explained.

Furthermore, said Budi, the Ministry of Transportation has also increased the role of regional governments to provide subsidies by conducting block seats, where the regional government guarantees the occupancy rate to be more than 60 percent.

"For example, the local government in Toraja, South Sulawesi. They provide support to airlines so that the occupancy rate can be above 70 percent and airlines can continue to serve these routes at affordable prices, because of the certainty of occupancy," he said.

Finally, said Budi, the proposal from stakeholders to eliminate or reduce the avtur value added tax (VAT) to 5 percent.

"Because aviation fuel affects flight operational costs by more than 40 percent. Especially for small aircraft such as propellers that serve remote areas. We will propose to the Ministry of Finance regarding this matter. 20 percent," he explained.