President Director Of Garuda Asks The Ministry Of Transportation To Review The Upper Tariff Of Airline Tickets: Don't Get Five Years Without Riding

President Director of Garuda Indonesia Irfan Setiaputra. (Photo: Doc. Antara)

President Director of Garuda Indonesia Irfan Setiaputra hopes that the government through the Ministry of Transportation (Kemenhub) can review the upper limit tariff (TBA) for aircraft tickets in line with changes in external conditions in the last five years.

Irfan said that the exchange rate and the volatile avtur price are challenges for Garuda Indonesia. The two external components, he said, had a big influence on costs (cost).

"Therefore, we are also discussing with the Ministry of Transportation to ask for a review, see this TBA. This means that TBA should not increase for five years. This is an exchange rate compared to five years ago how much, the price of the avtur compared to five years ago how much," said Irfan, quoted from Antara, Monday, May 13.

If the upper limit for aircraft tickets has not changed or has not increased since it was set in 2019, Irfan is worried that all airlines will face similar problems.

"Our proposal is more flexible in external conditions. The exchange rate or avtur price, we can't control it. We also can't ask Pertamina to continue to give discounts, that's not the way it is," he said.

Previously in November 2023, the Association of Indonesian National Aviation Companies (INACA) had suggested to the government to cancel the upper limit tariff on aircraft tickets and later the plane ticket price was handed over to the market mechanism.

At the time, INACA Chairman Denon Prawiraatmadja said that the current trends and dynamics of the aviation industry could not be separated from the price of the avtur and the rupiah exchange rate against the US dollar. Both external factors are difficult to control by industry.

However, according to the Ministry of Transportation, the upper limit tariff for plane tickets is based on the Aviation Law (UU). If there is a proposal to abolish the TBA, it must go through a revision of the Law first. One of the laws aims to protect consumers so that costs are not burdened beyond reasonable.

Despite facing various challenges, Garuda Indonesia itself has set revenues to continue to grow throughout this year. In the first three months of 2024, group revenue grew 18.07 percent to USD 711.98 million compared to the same period the previous year.

In the quarterly performance known as the low season period for the aviation industry, Garuda Indonesia as a group also recorded a net loss of 86.82 million US dollars in the first quarter of 2024, down 21.10 percent compared to a large loss record in the first quarter of 2023 of 110.04 million US dollars.

This year, Garuda Indonesia is targeting to strengthen the fleet by adding eight aircraft to come in stages. The eight aircraft consist of four narrow bodies of the Boeing 737-800NG and four wide-body consisting of the Boeing 777-300ER type, and the Airbus 330-300.

"We plan to add eight (airplanes) this year, but it's still not (realized). This (accretion of aircraft) leases, entry in (allocation) opex (operating expenditure/expension for operational costs)," said Irfan.