Antara, Jakarta – Tony Fernandes, the CEO of Capital A Berhad, AirAsia's parent company, has expressed concern over Indonesia's soaring aviation fuel (avtur) prices, which he claims are the highest in the ASEAN region.

"The price of jet fuel in Indonesia is the highest in ASEAN, approximately 28% [higher than in neighboring countries]," said Tony in a press conference held in Jakarta on Thursday, September 5, 2024. He even suggested that Indonesia's avtur rates might be among the most expensive globally.

Fernandes attributed this exorbitant pricing to a lack of competition among avtur suppliers in Indonesia. He contrasted the situation with Malaysia, where multiple companies offer avtur, creating a more competitive market. In Indonesia, avtur is only supplied by state-owned fuel and gas company PT Pertamina (Persero).

"With only one supplier, they can set whatever price they want," he said.

In addition, Tony pointed to other factors contributing to high airline ticket prices in Indonesia. The country's value-added tax (VAT) is levied twice on fuel for domestic flights, increasing costs by 11%.

To address these issues, Tony has requested a meeting with the Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan to discuss potential reforms.

He believes that eliminating tariff restrictions on airlines could significantly lower ticket prices, citing examples from Malaysia, the Philippines, and Thailand, where such restrictions are absent and flight costs are generally lower.

Source: https://en.tempo.co/read/1912987/airasia-boss-says-indonesias-avtur-price-is-the-highest-in-asea