Transportation Minister Issues Decree No 72/2019 on New Airfares

With regard to the promulgation of Transportation Ministerial Regulation Number 20 of 2019 on Procedures and Formulations of Airfare Ceilings for Domestic Commercial Airlines Economy Class, Minister of Transportation Budi Karya Sumadi, on 29 March 2019, signed Ministerial Decree Number 72 of 2019 on Airfare Ceilings for Domestic Commercial Airlines Economy Class.

Under the new Decree, the Minister has stipulated airfare ceilings for every domestic flights as listed in the Appendix of the Ministerial Decree.

The airfare ceilings are not included the Value Added Tax (VAT), Compulsory Contribution for Passengers Insurance imposed by State-owned insurance company Jasa Raharja, additional fare, and Passenger Service Charge.

“The stipulation of airfare ceilings as intended shall be a guideline for Commercial Airlines to determine the airline tickets for economy class based on their respective routes after obtaining route permit approval,” the third dictum of the Decree reads.

The Ministerial Decree also regulates the price floor for airplane tickets must be 35 percent of the price ceiling according to the specified service group.

Based on this Decree, in determining airfare for economy class, every Domestic Commercial Airlines must take into account: a. inputs from customer associations; b. customer protection; c. fair competition; d. publication by disseminating the applicable airfares to the public through printed and electronic media and/or publishing the information at every ticket counters.

“Domestic Commercial Airlines that violate regulations of the Ministerial Decree will be imposed with administrative sanction pursuant to the prevailing laws and regulations,” the sixth dictum of the Decree reads.

Price ceiling and price floor for Domestic Commercial Airlines tickets (including for aircraft that has a configuration of 30 or more seats) are mentioned in the apppendix of the Decree. The figure are, among others:

1. Ambon – Gorontalo Rp2,107,000 (price ceiling), Rp737,000 (price floor);
2. Ambon – Makassar Rp2,828,000 (price ceiling), Rp990,000 (price floor);
3. Balikpapan – Denpasar Rp2,374,000 (price ceiling), Rp831,000 (price floor);
4. Balikpapan – Makassar Rp1,516,000 (price ceiling), Rp531,000 (price floor);
5. Balikpapan – Surabaya Rp2,410,000 (price ceiling), Rp844,000 (price floor);
6. Banda Aceh – Batam Rp3,009,000 (price ceiling), Rp1,053,000 (price floor);
7. Banda Aceh – Medan Rp1,364,000 (price ceiling), Rp477,000 (price floor);
8. Banda Aceh – Pekanbaru Rp2,435,000 (price ceiling), Rp852,000 (price floor);
9. Bandung – Jakarta Rp420,000 (price ceiling), Rp147,000 (price floor);
10. Bandung – Denpasar Rp2,480,000 (price ceiling), Rp868,000 (price floor);
11. Bandung – Surabaya Rp1,965,000 (price ceiling), Rp688,000 (price floor);
12. Banjarmasin – Jakarta Rp2,591,000 (price ceiling), Rp907,000 (price floor);
13. Banjarmasin – Makassar Rp1,740,000 (price ceiling), Rp609,000 (price floor);
14. Banjarmasin – Surabaya Rp1,561,000 (price ceiling), Rp546,000 (price floor);
15. Batam – Jakarta Rp2,544,000 (price ceiling), Rp890,000 (price floor);
16. Batam – Padang Rp1,390,000 (price ceiling), Rp487,000 (price floor);
17. Bengkulu – Jakarta Rp1,757,000 (price ceiling), Rp615,000 (price floor);
18. Bengkulu – Palembang Rp1,061,000 (price ceiling), Rp371,000 (price floor);
19. Denpasar – Jakarta Rp2,692,000 (price ceiling), Rp942,000 (price floor);
20. Denpasar – Semarang Rp1,699,000 (price ceiling), Rp595,000 (price floor);
21. Jakarta – Padang Rp2,608,000 (price ceiling), Rp913,000 (price floor);
22. Jakarta – Pontianak Rp2,054,000 (price ceiling), Rp719,000 (price floor);
23. Jakarta – Surabaya Rp1,857,000 (price ceiling), Rp650,000 (price floor); and
24. Makassar – Surabaya Rp2,310,000 (price ceiling), Rp809,000 (price floor).

“This Ministerial Decree shall apply as of the date of its promulgation,” the eighth dictum of the Transportation Ministerial Decree Number 72 of 2019 which was stipulated on 29 March 2019 reads. (JDIH Kemenhub/ES)

Translated by : Rany Anjany Subachrum
Edited by : Yuyu Mulyani