BUSINESS – The cost of operating a single Jakarta-Bali flight has escalated to IDR 269 million (approximately USD 17,000), marking a significant 38% increase from the IDR 194 million recorded in 2019. As reported by CNBC Indonesia, this surge is attributed to rising expenses in aircraft maintenance, fuel, and other operational components.
A detailed breakdown reveals that maintenance, repair, and overhaul (MRO) costs have risen by IDR 31 million over the past six years. This increase is largely due to higher import taxes and customs duties on spare parts, which are predominantly sourced from abroad. The aviation industry has expressed concerns over these escalating costs, urging the Ministry of Finance to reevaluate the tax structure to alleviate the financial burden on airlines.
Fuel expenses have also contributed to the overall cost hike, influenced by global oil price fluctuations and currency exchange rates. Additionally, airport service charges and air navigation fees have seen incremental increases, further impacting the total operational costs.
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Despite these rising expenses, airlines are constrained by government-imposed fare ceilings, limiting their ability to adjust ticket prices accordingly. This has led to increasingly thin profit margins, with some carriers operating at near break-even points. The aviation sector is advocating for a revision of these fare caps to reflect the current economic realities and ensure sustainable operations.
The Ministry of Transportation has acknowledged the industry’s challenges but maintains that fare ceilings are essential to protect consumers from exorbitant prices. However, discussions are ongoing regarding potential adjustments to these regulations to strike a balance between affordability and the financial viability of airlines.
The situation underscores the complex dynamics between operational costs, regulatory frameworks, and market forces in Indonesia’s aviation industry. As stakeholders continue to navigate these challenges, collaborative efforts between the government and airlines are crucial to developing sustainable solutions that ensure both the industry’s health and consumer interests.
