Economy Class Airfares Down by 5 Percent

Info Penerbangan – The Ministry of Transportation lower the return rate upper limit and lower limit passenger service in economy class domestic scheduled air transport amounted to 5 percent.

The policy is flexible response measures MoT related decline in jet fuel prices and the strengthening of the rupiah against the US dollar. MoT step is intended to ensure the fulfillment of the safety aspects and to keep the Air Transport Enterprises remains healthy and can improve service to service users.

The decision is contained in the Minister of Transportation PM Number 14 Year 2016 concerning Mechanism Formulation Calculation and Determination of Rates and Lower Limit Upper Limit Passenger Services Scheduled Commercial Air Transport Economic Affairs.

In the calculation of these rates are still divide MoT airline grouping is based on the services provided are:

  • Full Service, which provides services to the maximum standards at the rate of 100 per cent of the maximum rate
  • Medium Service, which provides services to medium standard with rates as high as 90 per cent of the maximum rate
  • No Frills / Low Cost namely airlines that provide services with minimum standards with rates as high as 85 per cent of the maximum rate.

Accordance with the Regulation of the Minister of Transportation No. PM 14, 2016, the passenger tariff class service economy is calculated by taking into account four components, namely distance rates (tariffs per service flights per one flight), tax (VAT), dues compulsory insurance, passenger service charge ( PSC) as well as additional charge (surcharge) if any.

Especially for the lower limit of the passenger fare economy-class service as low as 30 per cent of the upper limit tariff corresponding group of services provided.

In 2016 PM 14 also regulates the obligations of Air Transport Enterprises, namely:

  • Magnitude fare economy class passenger service which does not exceed the highest distance rates set by the Ministry of Transportation and the corresponding group of services provided.
  • Against tariffs and tariff changes, the Agency of Air Transport Enterprises shall report to the DGCA and also required to inform service users no later than 15 calendar days before the applicable rates.
  • Air Transport Enterprises are also required to include details of the tariff components economy class passenger service scheduled commercial air transport in the country and is required to include the amount of the cost of services passenger aircraft or passenger service charge in the ticket.

The government appealed to all airlines in Indonesia comply with these rules. Any violation of the provisions of the PM 14, 2016, the Board of Scheduled Commercial Air Transport Business Home Affairs could be given the following sanctions, warning, reduction in frequency, delay granting these licenses, administrative fines and freezing service flights or corresponding legislation in force.

Separately, President Director of PT. Garuda Indonesia (Persero) Tbk. Arif Wibowo, Friday (12/02/2016) has said it will immediately reduce fares in accordance with the government decision to set tariffs upper limit and lower limit of the airline amounting to five per cent on February 27, 2016. The reduced rate of five percent, according to Arif, will not be burdensome businesses low. (GSP)