Transportation Ministry Issues Two New Regulations on Airfares

Ministry of Transportation has issued Regulation of Minister of Transportation Number 20 of 2019 on Procedures and Formulation of Calculation of Airfare Ceilings for Passengers of Economy Class Services for Domestic Commercial Airlines and Decision of Minister of Transportation Number 72 of 2019 on Airfare Ceilings for Passengers of Economy Class Services for Domestic Commercial Airlines.

“The two regulations were promulgated on Friday, 29 March 2019 and have been uploaded to the website www.jdih.dephub.go.id,” said Head of Communication and Public Information Bureau of Ministry of Transportation Hengki Angkasawan in Jakarta, Friday (29/3).

Hengki went on to say that the two regulations constitute a revision of Regulation of Minister of Transportation Number 14 of 2016 on the Formulation Mechanism for Calculating and Determining the Price Floor and Airfare Ceilings for Passengers of Economy Class Services for Domestic Scheduled Commercial Air Transportation. He added that the regulations would further facilitate the Government to evaluate the aircraft tariffs.

“Through this new Ministerial Decision, Directorate General of Air Transportation can regularly evaluate the tariffs every 3 (three) months, and/or at any time necessary in the event of significant changes that affect continuity of the activities of the air transport business enterprises,” Hengki explained.

In the meantime, Secretary to Directorate General of Air Transportation Nur Isnin Istiartono confirmed that the previous regulation is still in effect, adding that there is a new provision for airlines in determining the tariffs for each flight route.

“There is a new provision in determining the tariffs for each route. The airlines need to take into account inputs from users, costumer protection, as well as fair competition on a regular basis and to disseminate the tariffs properly,” said Isnin, adding that under the new regulation, the price floor is set at 35 percent of the price ceiling compared to 30 percent in the previous regulation.

“Ministry of Transportation is concerned over the costumers’ needs. Similarly, the Government also needs to protect business sustainability of the Air Transportation Business Enterprises,” Isnin said.

For this reason, the Government has called on the airlines to improve their services and comply with the policies set by the Government. (Ministry of Transportation PR/ES) 

Translated by: Muhardi

Edited by: M. Ersan Pamungkas