In Search of Reasonable Airfares

KOMPAS/RADITYA HELABUMI

Passengers gather in the domestic arrivals terminal at Soekarno-Hatta International Airport, Tangerang, Banten, on Sunday (13/01/2019). In response to complaints by travelers about high domestic air fares recently, the Indonesian National Air Carriers Association (INACA) has decided to reduce many fares.

To the traveling public the price of airplane tickets since the Christmas and New Year holidays has been regarded as very high, with some up by around 50 percent.

Passengers launched a petition, and on Friday (11/01/2019) airlines that are members of the Indonesian National Aviation Company Association (INACA) reduced some airfares.

This is a phenomenon that we can examine from various perspectives, but of course the most important are the interests of the service users, of the airlines and the national interest in general.

From the service user side, day-to-day flight transportation is increasingly becoming a necessity. By taking into consideration on-time efficiency and other factors, fast and safe transportation is increasingly becoming the main choice. Of course, if possible, at a rational fare.

Actually, over the last few weeks, before the petition was made, the public still accepted the prices set by the airlines. If during the Christmas and New Year holiday season there is a price increase, that is also understandable.

Meanwhile from the airline managements’ side, the price increase that has been applied is considered appropriate. Possibly indeed it is beyond the knowledge of consumers but there are operational costs such as for avtur (aviation fuel) and also other supporting costs that do increase, including the cost of air traffic services.

As disclosed by flight observer Alvin Lie in this daily on Monday (14/01/2019), the fact is that the prices of avtur rises. However, avtur prices in Indonesia and Malaysia differ by 20 percent to 30 percent.

That is also our question, as to why is our economy is higher-cost than neighboring countries? The answer is partly because we do not produce sufficient avtur, while demand continues to increase.

Besides thinking about the price of avtur, the airlines also still have to think about foreign-currency payments for the rent of aircraft amid volatile currency rates. Forcing the airlines to maintain low costs could be harmful as this might have an impact on aspects of aviation safety.

While there is a good opportunity at the beginning of the year, all relevant parties can sit together again to restore the stability of the national aviation industry. We appreciate the willingness of the parties that were willing to sit together yesterday to reduce fares, such as airport operators (PT Angkasa Pura I and II), AirNav Indonesia, Pertamina, and INACA members.

It is hoped that Pertamina will be able to reduce avtur prices by 10 percent given that fuel -- according to INACA Chairman Ari Ashkara (Kontan, 14/01/2019) -- contributes 40-45 percent of airline costs.

From this explanation, we get an illustration that beyond the public\'s expectation that airlines should maintain low fares, the airlines also have problems related to outside parties. The operation of the air-transportation industry seems to require the commitment of all related parties: operators, regulators, and industry and support services.