It is only temporary – perhaps in three months, then it (the tax) will be returned to the initial (amount of 11 percent). However, it depends on the Finance Ministry’s policy.
Jakarta (ANTARA) - Indonesian Transportation Minister Budi Karya Sumadi said that his side has left no stone unturned to stabilize the price of flight tickets to prevent them from causing high inflation.

At a working meeting with Commission V of the Indonesian House of Representatives (DPR RI) here on Wednesday, he stated that the ministry had urged the airlines to ensure efficiency and innovation to maintain affordability of the ticket prices.

However, he noted that several remote areas or regions usually served by propeller aircraft encountered difficulties in stabilizing the ticket prices since the cost of aviation fuel was higher in the areas, while the passenger occupancy is relatively low.

He also said that his side made joint attempts along with the local governments, airlines, and prospective passengers to optimize passenger occupancy.


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For instance, due to the low demand, airlines are urged to give discounts or offer lower prices. Meanwhile, people are expected to make the most of the promos to get cheaper tickets.

The step is expected to increase the passenger occupancy rate and airlines’ revenues, so that the companies do not need to impose maximal fare at peak periods to gain more profits.

"(Passenger) occupancy is not optimal on weekdays, especially during the day. Hence, if it (the flight ticket during weekdays) is promoted with discounts and so on, many people will take advantage of it," the minister suggested.


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For instance, the government of Toraja District, South Sulawesi Province, provides subsidies by guaranteeing the occupancy rate to reach 60 to 70 percent as well as participating in marketing the tickets to the public and civil servants, he affirmed.

Another attempt made by the ministry is urging stakeholders to reduce the Value Added Tax (VAT) of aviation fuels, from 11 percent to five percent.

"It is only temporary – perhaps in three months, then it (the tax) will be returned to the initial (amount of 11 percent). However, it depends on the Finance Ministry’s policy," Sumadi stated.

Sumadi said his side will soon hold a meeting with all stakeholders to discuss the follow-up to various attempts that have been implemented to stabilize the flight ticket prices, including with the banking sector and airlines.


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Translator: Adimas Fahky, Uyu Liman
Editor: Fardah Assegaf
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