Avtur Hope Can Be One Price

INACA Chairman Denon Prawiraatmadja (Gabriella Thesa Widiari / era.id)

JAKARTA - The high price of airplane tickets is still a polemic until the end of 2019. Airlines in the country often dispute the high price of aviation fuel which has an impact on the increase in flight ticket prices.

The Indonesian National Air Carriers Association (INACA) hopes that the government can realize the application of one-price avtur throughout Indonesia.

INACA Chairman Denon Prawiraatmadja said that currently there is a disparity in avtur prices in the western, central and eastern parts of Indonesia. According to him, if there is even distribution of avtur prices, it can also reduce the price of airplane tickets, which are currently soaring.

"Avtur must also be directed so that there is even distribution. If production costs go down, ticket prices will certainly go down so that they can help the community," said Denon after meeting with Coordinating Minister for the Economy Airlangga Hartarto at the Coordinating Ministry for Economic Affairs, Jakarta, Thursday, December 26.

According to him, currently the disparity in aircraft fuel prices between West, Central and East Indonesia can reach up to IDR 3,000 per liter. It is hoped that with the uniformity of prices, the prices offered by airline operators can be more competitive because aviation fuel is the largest component cost in aircraft operations.

Based on Pertamina's data in February 2019, the average avtur price in Eastern Indonesia reached IDR 10,000 / liter. In fact, the price of aviation fuel at Deo Airport (Sorong), Papua for the A-1 Jet type reached IDR 11,080 / liter (77.4 US cents / liter). This price is 34.9 percent higher than the avtur price at Soekarno Hatta Airport (Jakarta), IDR 8,210 / liter.

Denon admitted that the implementation of one price avtur is currently still under study by the association and the government. Meanwhile, several airports will soon be surveyed to see the condition of price disparities.

"Right now it is still under study. So later we will see if some airports in the east, especially those with quite high price disparities, will be a study of how to match the price of avtur in Jakarta. Hopefully next year it can be implemented," he added.

Other Reasons for Expensive Ticket Prices

According to him, avtur costs are the biggest contributor to airline operating costs, which is between 30 percent and 40 percent. In addition, foreign currency fluctuations are also a cause of sensitivity to operational costs. One of the effects is the increase in airline ticket prices.

"Now the government's concern is how to make aviation fuel a component of the government's study. Then, if it is related to the currency currency issue, maybe we will talk to the Ministry of Finance on how to make it stable," he added.

Denon ensured that airline ticket prices were highly dependent on market mechanisms, there was no coordination with each other from airlines.

"The ticket price is actually a market mechanism. But, as stated by several ministries, so that ticket prices can go down, airlines are welcomed," he said.