Minister Of Transportation Budi Karya: The Government Is Looking For A Balance In Flight Ticket Prices So That They Are Not Too High

Illustration. (Photo: Doc. Antara)

JAKARTA - The Minister of Transportation, Budi Karya Sumadi, said that the government is looking for a balance of flight ticket prices so that they are not too high and contribute to inflation.

"We are indeed maintaining a balance between the capabilities of the transportation sector by not increasing tickets. I have told the Director General that we have to talk in detail, how we regulate prices in a detailed context so that inflation in the sector is not too high," said Budi Karya in a press release. Jakarta's presidential palace, quoted from Antara, Thursday, August 18.

Budi Karya conveyed this after attending the Opening of the 2022 National Coordination Meeting for Inflation Control led by President Joko Widodo.

"One thing that is important is the participation of local governments in sharing, providing subsidies to the community because there are many inefficiencies in the regions," added Budi Karya.

According to Budi, some airplane transportations are less than 50 percent occupied, prompting airlines to have to neutralize prices.

"If there is a subsidy, they help market it until the occupancy increases, the price will be maintained. The price is directly proportional to the occupancy and there are many areas where the occupancy is low on certain days, this must be managed," explained Budi Karya.

Even so, Budi Karya admitted that the increase in avtur price also caused the price of plane tickets to rise.

"But there is management that must also be coordinated with the regions so that inflation does not become high. We invite each cluster such as South Sulawesi, South Sumatra, Kalimantan, Aceh and our regions to talk. We invite them to join together to find a better occupancy rate so that the price could be better," added Budi Karya.

Budi Karya also said that he had tried to communicate with the local government regarding the subsidy from the local government.

"We have (communicated) and today, with the President's order, we will intensify it," said Budi.

At the 2022 National Coordination Meeting for Inflation Control, President Jokowi said that he had received a number of complaints about the high price of airline tickets.

"I also heard complaints, 'Sir, the price of plane tickets, sir, is high.' because the international avtur price is also high," said President Jokowi at the meeting.

The Ministry of Transportation has indeed allowed airlines to increase flight ticket prices. This is in accordance with the implementation of the Ministry of Transportation's policy KM 142 of 2022 regarding the amount of additional costs (surcharges) caused by fuel surcharges.

The Ministry of Transportation has implemented two fuel surcharge policies. In early 2022, the Ministry of Transportation approved airlines to increase prices by 10 percent above the upper limit fare (TBA). This time, the government allows airlines to set a tariff of 15 percent of TBA.

It is known that air freight rates are the largest contributor to inflation from the administered price group, apart from household fuel components, filtered kretek cigarettes and electricity tariffs. The Central Statistics Agency (BPS) noted that this group contributed to inflation in July 2022 of 0.21 percent month to month (mom) or 6.51 percent year on year (yoy) on an annual basis.