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Domestic airfares may soar as Ministry of Transportation raises surcharge limit

Coconuts Jakarta - August 8, 2022

Brace for potentially even pricier airline tickets, as the Ministry of Transportation has raised the surcharge limit for domestic airfares amid rising fuel costs.

Under a ministerial decree issued on Aug. 4, the highest possible surcharge imposed on a flight operated by a jet plane is now 15 percent of the price ceiling of any given route. For propeller planes, the surcharge can go up to 25 percent.

The surcharge limits were previously set at 10 percent and 20 percent, respectively. The new policy will be subject for review in three months' time.

The ministry said that airlines have been notified of the policy update, but urged them to keep airfares reasonable nonetheless.

"As we know, the people's purchasing power has not fully recovered since the pandemic," Acting Air Transportation Director General Nur Isnin Istiartono said in a statement today, adding that airlines are under no obligation to raise their surcharges to fit the new standards.

Irfan Setiaputra, CEO of flag carrier Garuda Indonesia, said the airline will endeavor to keep surcharges below the government's 15 percent recommendation. Instead, Irfan said Garuda will independently calculate surcharges based on fluctuating fuel costs.

For reference, a one-way flight with low cost carrier Lion Air from Jakarta to Bali departing tomorrow costs as low as IDR732K (US$49.20), tax included. Other airlines, low cost or otherwise, charge upwards of IDR1 million for the same trip.

Source: https://coconuts.co/jakarta/news/domestic-airfares-may-soar-as-ministry-of-transportation-raises-surcharge-limit