Indonesia’s Efforts to Lower Domestic Airfare: More Planes and Deregulation on the Horizon

Jokowi to Inaugurate Two Strategic Airports in Papua (photo: envato elements)

The Indonesian government is actively working to address the high cost of domestic airfare, considering strategies that include increasing the number of aircraft and implementing deregulation measures.

Minister of Tourism and Creative Economy, Sandiaga Salahuddin Uno, emphasized that the government aims to boost flight availability by opening opportunities for both foreign and domestic companies to introduce more planes and new routes.

“There are already many interested parties, including existing companies and joint ventures with domestic entrepreneurs,” Sandi stated in an official release on Friday, May 17, 2024.

Although Sandi did not disclose the names of the companies interested in expanding their fleets and routes, he expressed hope that these plans could be realized within the next two to three months.

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In addition to increasing the number of aircraft and routes, the government is set to introduce new regulations for aviation fuel to enhance competitiveness. The government is also planning to deregulate existing policies to make air travel more affordable.

“We hope that cheaper tickets can be realized, and we predict this could happen by mid-year,” Sandi added.

These measures were discussed during a Coordination Meeting for the Follow-up Optimization of Foreign Vessel Business Activities at the NIPA Transshipment Anchorage Area (NTAA) and Benoa Cruise Terminal. This meeting was led by Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, in Bali on Thursday, May 16, 2024.

Previously, Sandi predicted that airfares would start to decrease in the second half of 2024, coinciding with an increase in the number of airlines and flights within Indonesia.

“We predict that in the second half of this year, tickets can hopefully be more affordable,” he reiterated during a press conference on Tuesday, May 7, 2024.

According to Sandi, Garuda Indonesia has already added approximately eight new aircraft, and other airlines such as AirAsia, Lion Air, Pelita Air, and TransNusa have also expanded their fleets. Despite these additions, the government will continue to monitor ticket prices to ensure affordability.

He remains optimistic that the increase in the number of aircraft will help resolve the issue of high ticket prices. “We continue to address the problem of high ticket prices, and hopefully, we can overcome it with the addition of more aircraft,” Sandi concluded.

Through these concerted efforts, the government aims not only to reduce domestic airfare but also to improve overall flight availability and competitiveness, ultimately benefiting travelers and boosting the tourism sector.