Ministry of Transportation Allows Airlines to Adjust Costs Due to Increase in Global Avtur Prices

JAKARTADAILY.ID – Following the increase in world oil and aviation fuel prices, the Ministry of Transportation allowed airlines to make fuel surcharges for domestic passenger air transportation.

This provision is enforced to maintain the continuity of airline operations and to ensure connectivity between regions in Indonesia is not disrupted.

This provision is contained in the Decree of the Minister of Transportation Number 68 of 2022 concerning Additional Charges (Fuel Surcharge) for Economy Class Passenger Services Domestic Scheduled Commercial Air Transport which comes into force as of April 18, 2022.

"This provision was made after coordinating and communicating with relevant stakeholders such as airlines, aviation associations, aviation practitioners, YLKI, and other related elements in the aviation sector," said Transportation Ministry Spokesperson Adita Irawati in Jakarta, Tuesday April 19, 2022.

Adita explained that the increase in world avtur prices greatly affected flight operating costs.

“If the increase affects flight operating costs by more than 10 percent, the government can allow airlines to set additional costs such as fuel surcharges. This provision also applies to other countries, one of which is the Philippines,” said Adita.

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Adita said this provision is not binding. This means that airlines can apply additional costs in the form of fuel surcharges or not apply them. This provision will be evaluated every three months or if there is a significant change in flight operating costs.

"Supervision will be carried out by the Ministry of Transportation through the Directorate General of Civil Aviation, and will be evaluated according to the dynamics of changes in world avtur prices," said Adita.

Adita further emphasized that this provision has no effect on adjustments or changes to the lower limit fare (TBB) or upper limit fare (TBA) of flights.

"The provisions of TBB and TBA have not changed according to what is currently in effect," Adita explained.

 “Ketentuan TBB dan TBA tidak berubah sesuai yang saat ini berlaku,” jelas Adita.

The amount of additional costs (fuel surcharge) is distinguished based on the type of jet and propeller aircraft. For jet type aircraft, a maximum of 10% of the upper limit tariff can be applied according to the service group of each Air Transportation Business Entity.

Meanwhile, for propeller type aircraft, a maximum of 20% of the upper limit tariff can be applied according to the service group of each Air Transportation Business Entity.