Battered, Airline Screams Asking for Airline Ticket Limit to be Revised

Jakarta –

Lion Air Group revealed that business conditions were hit by the increase in aviation fuel prices and the strengthening of the United States (US) dollar index. This condition makes aircraft maintenance costs more expensive.

President Director of Lion Air Group Daniel Putut Kuncoro Adi said that currently many vendors providing material were closed, once there were providing higher prices. The weakening rupiah exchange rate also forced operators to pay more according to the exchange rate.

“The components we have to pay for or materials, spare parts, including transportation and logistics are very expensive because we have to pay in US$,” he said in an RDP with Commission V of the Indonesian House of Representatives, Tuesday (28/6/2022).

Daniel hopes that there will be a revision of Ministerial Regulation (PM) Number 20 of 2019 which regulates the formulation of the calculation of the lower limit tariff (TBB) and upper limit tariff (TBA) for determining flight ticket prices. The reason is that the regulation is said to be no longer in accordance with current conditions.

“PM 20 of 2019 was issued before the COVID-19 pandemic, so there are a lot of revisions or at least a review that must be done, at least we can reduce aircraft operational costs,” he said.

In addition, the increase in air traffic that affects travel time makes operators have to pay higher production costs. Daniel gave an example of the route changes that occurred for the Jakarta-Tanjung Karang flight.

“Cengkareng to Tanjung Karang, which we used to be able to take in 35 minutes, now maybe because of traffic it can take up to 50 minutes or even 1 hour,” he explained.

Likewise with the Bali-Lombok route whose flight times change and ultimately affect production costs. If the old rules are not reviewed, said Daniel, it is not impossible if the airline operator chooses to close the route because it is not profitable.

“Bali-Lombok is also very vulnerable because in terms of flight time, it has changed, so even this if it can’t be done,review back then we can’t, maybe other flight operators don’t want or are not able to run it because with 100% full passenger conditions, we can’t take profit from it,” he said.

The increasingly limited number of planes is also one of the main reasons why tickets are getting more expensive. Read on the next page.

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