Government Receives Input From AirAsia CEO Regarding Airline Ticket Prices

CEO of Capital A Berhad, parent company of airline AirAsia, Tony Fernandes. (Photo: Doc. Antara)

JAKARTA - The Ministry of Tourism and Creative Economy (Kemenparekraf) revealed that it has received input from Capital A Berhad CEO AirAsia airline parent Tony Fernandes regarding domestic flight ticket prices.

"We have received Tony Fernandes' input through the media and it has indeed become our finding," said Tourism and Creative Economy Minister Sandiaga Salahuddin Uno in Jakarta, quoted from Antara, Tuesday, September 10.

The three factors that heavily burden the aviation industry, he continued, are taxes, duties, and aviation fuel.

The Ministry of Tourism and Creative Economy, which is also involved in the Task Force (Satgas) for reducing aircraft ticket prices, revealed that currently cross-ministerial ministries are trying to make the price of airplane tickets in Indonesia more affordable at the end of October.

"So that at the end of October we hope that ticket prices can be more affordable. At least down 10 percent of our initial target," concluded Sandiaga.

It is known, previously CEO of Capital A Berhad, parent airline company AirAsia Tony Fernandes revealed, there are several obstacles experienced by airlines, so it is difficult to present affordable domestic flight tickets in Indonesia, one of which is the high price of aviation fuel which is 28 percent higher than other ASEAN countries.

"The fuel price in Indonesia is the highest in ASEAN, around 28 percent," said Tony.

He also revealed that there is a double tax imposed on domestic flights, namely taxes are imposed on aircraft fuel and on passenger ticket prices.

His party also proposed the abolition of import duties for aircraft parts so that it is hoped that it can significantly reduce the structure of airline operating costs.

Tony also proposed to the government to review the policy on upper-ticket domestic flight tickets.

According to him, this limit review can provide greater flexibility for airlines in setting prices based on dynamic demand and operational costs, as well as encouraging healthy competition in the aviation industry.