Stabilize Airline Ticket Prices, Minister Of Transportation Budi Asks Local Governments To Contribute: Give Subsidies And Other Incentives

JAKARTA - The Minister of Transportation, Budi Karya Sumadi, revealed a number of steps to stabilize air ticket prices as an effort to help control inflation in Indonesia, especially from the transportation sector. One of them is by encouraging local governments to provide subsidies.

"Following the direction of the President, we have and will discuss it in more detail and intensively with a number of stakeholders, including the regional government," he said in an official statement, Thursday, August 18.

Budi also admitted that he had sent a letter to the regional government to support connectivity by helping to ensure passenger occupancy levels, providing subsidies and other incentives.

In some areas, continued Budi, the aircraft occupancy rate is only 50 percent or even less. Therefore, local governments are encouraged to participate in providing subsidies and also participate in marketing so that aircraft passenger occupancy increases.

"If the occupancy rate can increase, then the price will be controlled, because the ticket price is directly proportional to the occupancy rate," said the Minister of Transportation.

Budi admits that the high price of avtur causes the price of plane tickets to rise. Therefore, Budi said there is a strategy that must be coordinated to control ticket prices.

"The avtur price does cause ticket prices to rise, but there is a management strategy that must be coordinated in detail so that ticket prices can remain under control and do not have the effect of rising inflation that is too high," said the Minister of Transportation.

Budi revealed a number of efforts had been made by the Ministry of Transportation to control ticket prices in the midst of rising global aviation fuel prices, including: establishing a policy of imposing a non-tax state revenue (PNBP) rate of zero rupiah or zero percent for landing services.

"Aircraft Placement and Storage (PJP4U), which is valid at the Airport Operator Unit (UPBU) through the Decree of the Director General of Civil Aviation Number PR 14 of 2022. In addition, the Ministry of Transportation has asked the Ministry of Finance to impose VAT relaxation on tickets and fuel (avtur) ," he said.

Previously, President Joko Widodo (Jokowi) claimed to have received complaints regarding the high price of plane tickets when he went to the field. Responding to the complaint, Jokowi asked Transportation Minister Budi Karya Sumadi and SOE Minister Erick Thohir to resolve the issue.

"In the field, I also heard complaints, sir, the price of the plane, sir. I reacted immediately, there was the Minister of Transportation, I ordered this to be completed immediately," he said at the opening of the 2022 National Coordination Meeting for Inflation Control, reported by the Presidential Secretariat YouTube, Thursday, 18 August.

On the occasion, the former Governor of DKI Jakarta also asked the Minister of SOEs Erick Thohir to increase the number of Garuda Indonesia airliners.

The addition of this fleet, said Jokowi, aims to reduce the price of expensive airline tickets. Even though Jokowi admits it is not easy to return ticket prices to normal numbers, considering that international aviation fuel prices are also high.

"Garuda, the Minister of SOEs, I also convey that I will immediately add more planes so that prices can return to normal, even though it is not easy because the international avtur price is also high," he said.