Upper limit fare (TBA) determination apparently cannot be a reference for the ticket prices paid by passengers. Moreover, the fare stated in the Decree of the Transportation Minister No. 106/2019 only includes the calculation of basic fare. There are still other components that can determine the price of airline tickets.
According to the Indonesian Consumers Foundation (YLKI), some of the components are value added tax (VAT), Jasa Raharja insurance payment, airport tax (PJP2U), and additional fees that can be charged by airlines to passengers. “Not all of the fare components go to the airline’s pocket,” YLKI Chairman Tulus Abadi said a few days ago.
In the homecoming season for Eid al-Fitr (Lebaran) this year, the public was shocked by the news of the high price of airplane tickets. The ticket price for a one-way trip from Soekarno Hatta Airport to Pekanbaru on Sunday (6/2) was said to have reached Rp 6.61 million. Several airlines immediately issued a statement to respond to the news. According to Lion Air, the ticket price consists of two Batik Air flights for the Soekarno Hatta - Kualanamu (Medan) route worth Rp 5.65 million plus the Kualanamu - Pekanbaru route worth Rp 955 thousand.
Lion Air Corporate Communications Strategic Danang Prihantoro has ensured that Lion sells tickets according to government regulations. The airline's fare has calculated the costs added with the regulated components, such as the 10-percent VAT, Jasa Raharja insurance payment, and airport tax. “We don’t sell tickets that exceed the upper limit,” he wrote a few days ago.
Garuda Indonesia’s flight ticket for the Bandung-Medan route was reportedly sold at Rp 21 million, but the state-owned airline immediately denied the news. The ticket price is not a direct flight, but having transit in many cities such as from Bandung to Denpasar then continues to Jakarta and ends in Kualanamu. This is why the ticket prices are very expensive. Garuda claimed to sell tickets for the Jakarta-Medan route for Rp 2.1 million, which is in accordance with the government's upper limit.
The public was previously busy talking about the high price of airline tickets for certain routes ahead of the 2019 Lebaran holidays. On the online ticket sales platforms, such as Traveloka.com or Tiket.com, the ticket prices for the Bandung-Medan and Jakarta-Makassar routes can be sold of up to five or six times the normal fare.
Transportation Ministry’s Air Transportation Director General Polana B. Pramesti said it happened because the app platform displayed prices for indirect flights, meaning it is not the airline that sets the ticket price very expensive.
The ministry has also asked airlines to reprimand ticket sales partners or agents not to display unreasonable prices. “If airlines are not reminded to reprimand their partners, it will adversely affect the airlines' reputation while making potential passengers upset,” Polana said on Friday (5/31).
Transportation Ministry Ensures No Airline Violates Upper Limit Fare
Polana ensures that no airline has violated the regulation of the upper limit fare. She also said that the upper limit fare attached to the Minister of Transportation Regulation No. 109 is not the ticket price but there are still a few additions. However, the fare is still under the control of the government.
In addition to the costs listed in the Minister of Transportation Regulation No. 106, Polana said there are also costs that are adjusted to the services of each airline. Therefore, the Transportation Ministry allows full service airlines - Garuda Indonesia and Batik Air - to sell tickets by including all components of the upper limit fare.
Medium service airlines - Sriwijaya Air and NAM Air - sell with a maximum of 90 percent of the upper limit fare. Meanwhile, low-cost airlines - Lion Air, Citilink, and Indonesia AirAsia – are allowed to sell at a price limit of 85 percent of the fare. “Airlines that violate will be subject to applicable sanctions,” she said.
The Minister of Transportation Regulation No. 20/2019 concerning the Upper Limit Fare Calculation Formulation and Procedure for Economic Class Service Passengers on Domestic Scheduled Commercial Air Transportation does indeed regulate additional costs borne by passengers. This additional fee applies because of three things, which are fluctuations in avtur prices, costs borne by the airline during holidays, and costs borne by passengers due to additional services.
If further elaborated, additional costs due to fuel fluctuations are imposed if there is an increase in avtur prices in three consecutive months and lead to a 10 percent increase in operational cost. It increases during holidays as airlines bear the operational cost if their planes are empty when leaving or returning.
Meanwhile, the additional services referred to are additional service costs before, during and after the flight. “The insurance protection benefits and/or other forms of additional services,” the article 10 of the Minister of Transportation Regulation No. 20 stated.
The upper limit fare is calculated on the basis of direct and indirect costs. Based on Article 15 and 16 of the Minister of Transportation Regulation No. 20, direct costs consist of airplane lease fee, crew and technician salaries, maintenance, lubricant, airport services, navigation services, ground handling, and the cost of food catering. Indirect costs consist of organizational cost and the cost of marketing and sales.
Katadata.co.id tried to analyze what percentage of airlines sell tickets compared to the applicable upper limit fare. Using the search feature in the online travel app on Wednesday (5/29), the price of Sriwijaya Air flight tickets for the Jakarta - Makassar route on June 2 reached Rp 1.9 million.
When compared with the upper limit fare, the limit set by the government reached Rp 1.83 million. Flight tickets of Lion Air and Citilink for the Jakarta - Semarang route reached Rp 813 thousand even though the upper limit fare was set at Rp 796 thousand.
Airplane Passenger Numbers Declining
It is not yet known whether the formulation of flight pricing has kept airplane ticket prices high and has resulted in people holding back from using air transportation for homecoming. Since the beginning of the year, the number of airplane passengers has dropped due to high ticket prices. Although the government has tried to reduce airfare, there was still a decrease in the number of passengers, especially during the Lebaran homecoming season.
Based on data from the Indonesian Online Transportation Information System (Siasati) owned by the Transportation Ministry, the cumulative number of flight passengers up to two days before Lebaran (H-2) was only 1.2 million passengers, falling 30.7 percent from 2018. Meanwhile, passenger arrivals up to H-2 were only 1.23 million, declining 32.6 percent from the same period last year.
Growth in Passenger Numbers during Homecoming
Prediction for 2019
The number of passengers actually increased on executive class trains, which reached 19.9 percent this year. Until H-2, the number of passengers reached 272,627 people even though the passengers transported were only 227,228 people in the same period last year.
Stagnation and decline in passenger numbers were seen in almost all major airports, starting from Adisucipto Airport (Yogyakarta) and Minangkabau Airport (Padang) to Husein Sastranegara Airport (Bandung) and Juanda Airport. However, Transportation Minister Budi Karya Sumadi had his own answers regarding this condition.
According to him, the Trans Java Toll Road also influenced the decrease in the number of airplane passengers, especially on the Island of Java. Moreover, he said the mobilization of vehicles on the toll road is relatively easy to be done during the homecoming season. “Certainly, there are many users of the Trans Java Toll Road,” Budi said some time ago.