Maudey Khalisha, Jakarta – The Indonesian National Air Carriers Association (INACA) has urged the government to approve a 15 percent increase in the fuel surcharge and raise the domestic airfare cap (TBA) for both jet and propeller aircraft by the same margin, as airlines grapple with mounting cost pressures.
The current fuel surcharge is still based on regulations issued in 2023, while the TBA remains based on the fare ceiling set in 2019.
In addition, INACA called for temporary stimulus measures, including forgoing the value-added tax (VAT) on jet fuel and domestic tickets, easing airport service charges (PJP4U) and allowing the rescheduling of outstanding airport and navigation payments.
The association said these steps are needed to ensure "business sustainability, safety assurance and the availability of national air transport connectivity while maintaining a high level of safety".
The request comes as airlines face intensifying pressure from global geopolitical tensions around the United States-Israeli war on Iran.
"This situation has resulted in an increase in global oil prices and the weakening of the rupiah against the US dollar, both of which significantly contribute to rising operational costs for national airlines," INACA secretary general Bayu Sutanto said in a press release on Wednesday.
According to him, around 70 percent of airline operating costs are denominated in US dollars, while revenues are largely in rupiah, leaving carriers exposed to currency volatility.
The rupiah has weakened from an average of Rp 14,136 per US dollar in 2019 to around Rp 17,000 in March 2026, a decline of more than 20 percent. At the same time, global oil prices have surged by 57 percent to about US$110 per barrel, pushing domestic jet fuel (avtur) prices up by between 34 percent and 48 percent compared with 2019 levels.
INACA warned that prices could climb further as state energy firm Pertamina, which dominates jet fuel sales in the country, adjusts its rates on a monthly basis, with the next revision due on April 1.
Operational challenges have also intensified. Airlines have been forced to reroute flights to avoid conflict zones in the Middle East and Europe, increasing fuel consumption, while supply chain disruptions have delayed aircraft maintenance.
"Supply chain disruptions have extended spare parts delivery times from two to three days previously to seven to 10 days, accompanied by higher shipping costs," Bayu said.
On the demand side, airlines are seeing softer passenger traffic, particularly on umrah (minor haj) routes, as well as potential declines in inbound tourism from Europe and the Middle East.
Bayu added that airlines in other regions have already adjusted fuel surcharges, with increases ranging from 5 percent to 70 percent.
Responding to the proposal, air transportation director general at the Transportation Ministry, Lukman F. Laisa, said the government would carefully assess the request.
"Among the factors being considered are the economic condition of airlines, public purchasing power, the sustainability of the aviation industry, as well as aspects of safety, security and service," he said, as quoted by Bisnis, on Wednesday.
He noted that any decision on the proposed stimulus measures would also take into account fiscal conditions and broader public interests, with the government seeking to balance industry sustainability with consumer protection.
Source: https://asianews.network/indonesian-airlines-push-for-15-fuel-surcharge-fare-cap-hike-as-costs-soar