March 26, 2026 | 11:48 am
TEMPO.CO, Jakarta - The Indonesian National Air Carriers Association (INACA) has proposed a 15 percent increase in airline ticket ceiling prices for both jet and propeller aircraft, citing rising operational costs driven by global geopolitical tensions.
INACA Secretary General Bayu Sutanto said the proposal aims to anticipate a potential increase in aviation fuel (avtur) prices by state energy firm Pertamina starting April 1, 2026, as well as to ensure business continuity, safety standards, and national air connectivity.
The proposed adjustment would revise the current ceiling tariff regulated under the Minister of Transportation Decree No. KM 106 of 2019. Bayu noted that the benchmark exchange rate used in the regulation—Rp14,136 per US dollar—is significantly lower than the current rate of around Rp17,000, reflecting a roughly 20 percent increase.
According to INACA, around 70 percent of airline operational costs are denominated in US dollars, while revenues are earned in rupiah, making airlines vulnerable to exchange rate fluctuations.
The pressure on the aviation sector has intensified following the escalation of conflict involving the United States, Israel, and Iran since February 28, 2026, which has disrupted global oil supply routes. Crude oil prices surged from around US$70 to US$110 per barrel in March, pushing aviation fuel prices in Indonesia to between Rp14,000 and Rp15,500 per liter—up 34 to 48 percent compared to 2019 levels.
INACA also warned that aviation fuel prices could rise further in April, in line with global market trends.
In addition to higher fuel costs, airlines are facing supply chain disruptions affecting aircraft maintenance. The delivery time for spare parts, particularly for aircraft on ground (AOG), has extended from 2–3 days to 7–10 days, accompanied by higher logistics costs.
Beyond the fare adjustment, INACA has proposed a 15 percent increase in fuel surcharges and requested temporary government incentives, including VAT postponement on aviation fuel and domestic tickets, as well as reduced airport service charges.
Responding to the proposal, the Ministry of Transportation said it is still reviewing the request and has yet to make a decision.
Director General of Civil Aviation Lukman F. Laisa stated that the government understands the challenges faced by the aviation industry due to rising fuel prices, exchange rate volatility, and increasing operational costs.
He emphasized that any policy decision would aim to balance industry sustainability with consumer protection, ensuring that air transportation remains safe, secure, affordable, and capable of maintaining national connectivity.
The ministry is currently coordinating with stakeholders, including airlines, airport operators, and fuel suppliers, to monitor developments and assess the broader impact on the aviation sector.
“In principle, the government considers various aspects, including airline economic conditions, public purchasing power, and service quality, alongside safety and security,” Lukman said.
Read: Indonesia Denies Reports of International Flight Restrictions
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