Ni Made Tasyarani, Jakarta – Local airlines have welcomed the government's move to allow airfare to increase up to 13 percent amid surging jet fuel (avtur) prices following the US-Israeli attacks on Iran. However, experts warned that airlines need to be prepared for weaker demand following the policy.

National flag carrier Garuda Indonesia revealed that it will "adjust" airfares in line with the Transportation Ministerial Decree No. 83/2026.

"This regulation is a strategic step in maintaining the balance between airlines' operations and air transport service accessibility for the public, as well as supporting the economic stability in the national aviation industry," said Glenny H. Kairupan, CEO of Garuda Indonesia, in a statement on Wednesday.

Avtur prices have soared by over 70 percent following the outbreak of war in the Middle East, triggering a global energy crisis. At Soekarno Hatta International Airport in Tangerang, the prices of aviation fuel jumped to Rp 23,551.08 (US$1.38) per liter in April, from Rp 13,656.51 in March.

As a response, government raise the aviation fuel surcharges, which are charged to consumers to cover fuel costs, from 10 percent for jet and 25 percent for propeller planes to 38 percent for both type of aircrafts, on Monday. Around Rp 2,6 trillion (US$151.6 million) has been earmarked to provide VAT waiver on tickets and to keep the overall price increase at 9 to 13 percent, expecting the raise will not excessively hurt consumers. Additionally, the government has exempted import duty on spare parts to ease mounting operational pressures in the aviation industry.

Amid the ongoing pressure on the aviation industry, Glenny added that the firm was also preparing mitigation steps through an optimization assessment of flight frequencies and schedules in several routes.

Source: https://asianews.network/airlines-brace-for-fare-hikes-as-jet-fuel-prices-climb