JAKARTA - Deputy Chairman of Commission V of the House of Representatives of the Republic of Indonesia, Syaiful Huda, highlighted the phenomenon of the high price of domestic air tickets after the Minister of Health (Menkes) Budi Gunadi Sadikin stated that medical volunteers assigned to Aceh had to take a transit route via Kuala Lumpur, Malaysia, in order to get cheaper travel costs. Huda also urged the government to reform the structure of domestic air ticket costs.
"This is the irony of our air sovereignty. The Jakarta-Medan ticket can reach Rp8-9 million during disasters, while Jakarta-Kuala Lumpur is only Rp1.5 million. This is triggered by the burden of double taxation, where domestic routes are subject to 11 percent VAT, while international routes are zero percent," said Syaiful Huda to reporters, Tuesday, January 13.
Huda said the high ticket prices in Indonesia were not just a problem of seat availability, but were the result of an inefficient cost structure compared to neighboring countries such as Malaysia, Thailand, and Singapore.
According to him, there are several main triggers for the high ticket price. In addition to domestic VAT, the high price of avtur due to the lack of competition among fuel providers at airports and the burden of import duties on aircraft parts which reach 70 percent of maintenance costs, are weighting factors.
"We have long encouraged policy breakthroughs from the government so that the price of domestic air tickets can compete with other countries," he said.
To keep prices competitive in the ASEAN region, said Huda, the government must take strategic steps. Among them is the abolition of the domestic ticket VAT, the relaxation of import duties on spare parts, and opening up space for multi-provider avtur at major airports.
"Without fiscal policy intervention and the dismantling of the avtur monopoly, national airlines will continue to be squeezed by high operating costs, and the public will be the victim," he explained.
This PKB politician emphasized that the reduction in air ticket prices is believed to have a significant multiplier effect on the national economy.
Huda predicts that a 20 percent reduction in tariffs will be able to increase intra-island tourist movement by 35 percent. This will also have an impact on the efficiency of air cargo logistics, which is crucial for the trade of MSMEs and the stability of food prices in remote areas.
"If the ticket is cheap, the length of stay of tourists increases and shopping in the UMKM sector increases. The trade sector will be more efficient because the air freight costs will decrease. Most importantly, the country has high mobility in responding to emergency situations without having to rely on foreign routes," he concluded.
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