Thinking of an end-of-the year trip for this holiday season? Here’s some good news:
In a move aimed at easing travel costs for the upcoming holiday season, Indonesia’s Ministry of Transportation (Kemenhub) has announced a 10% reduction in domestic airfare prices.
The policy, set to take effect during the Christmas and New Year period from December 19, 2024, to January 3, 2025, follows a directive from President Prabowo Subianto to alleviate the financial burden on travelers.
The price cut is expected to apply to flights connecting all airports nationwide.
The reduction hinges on slashing costs such as fuel surcharges, passenger service charges (PJP2U), and aviation turbine fuel (avtur), which means the cost reduction requires collaboration between airlines, airport operators, state-owned fuel supplier PT Pertamina, and air navigation company AirNav.
“We aim to ensure the overall fare reduction is achieved without compromising service quality,” said spokesperson for Kemenhub Elba Damhuri.
Airlines have also committed to offering an 8% reduction in fuel surcharges, while cutting propeller aircraft-related costs by 5%. Additionally, AirNav will extend operating hours at key airports to accommodate heightened demand during the holiday season.
Broader Economic Goals
The fare reduction policy is expected to boost domestic tourism and economic activity in the year’s final quarter. “This decision is a gift to Indonesians planning holiday travel, and it will also support the economy and tourism,” Damhuri said.
However, the implementation faces logistical hurdles. PT Angkasa Pura Indonesia and other airport authorities are seeking approval from the Ministry of State-Owned Enterprises to extend fee reductions to major airports like Soekarno-Hatta and Denpasar.
While the current calculations project a 10% average reduction in ticket prices, these estimates exclude potential tax incentives from the Ministry of Finance.
“This analysis does not factor in VAT incentives, as they fall under the jurisdiction of the Ministry of Finance,” Damhuri concluded.
The temporary price cut will apply to unsold tickets within the designated period, while airlines are encouraged to provide retroactive benefits for already-purchased tickets, where feasible.
As the policy unfolds, travelers across Indonesia can anticipate more accessible holiday travel options, with ripple effects expected to energize the nation’s tourism and aviation sectors.
