The Indonesia National Air Carriers Association (INACA) chairperson Denon Prawiraatmadja said the hike in air ticket fares as the fuel surcharge imposed would not increase air logistics costs. This is because there is no regulation on the tariff limit for logistics transportation.
“It means that if the supply is higher than the demand, the price will surely go up. That’s just a market mechanism,” Denon told Tempo.
According to him, the logistics cost depends on the market. When the government imposed the fuel surcharge for passenger transportation, there was no change in the cost of shipping goods.
A fuel surcharge is an extra fee imposed on the ticket price following the soaring price of airplane fuel. This additional tariff has been in effect for three months ago. However, on August 4, the Transportation Ministry allowed airlines to raise the percentage from 10 percent to 15 percent.
Denon believed that the increase in the fuel surcharge rate was only aimed at facilitating airlines to adjust their flight ticket fares according to the limits set by the government.
“As the price of jet fuel and the dollar exchange rate rise, each airline is allowed to make [airfare] adjustment,” said Denon who is also the Chamber of Commerce and Industry (Kadin) deputy chairperson for transportation affairs.
