The government is considering abolishing the policy of maximum prices for airline tickets.

JAKARTA (ANTARA) – The Indonesian government is considering a proposal submitted by the Indonesian National Air Carriers Association (INACA) to abolish the maximum airfares (TBA) policy and adopt a market-based system.

“The government is looking into it,” Air Transport Secretary General Sigit Hani Hadiyanto said during the AERO 2024 Indonesia Summit in Jakarta on Tuesday.

Hadiyanto, however, did not provide any details about the government’s assessment.

On the same occasion, INACA President Denon Prawiraatmadja expressed hope that the government would implement a policy enabling the setting of airline ticket prices based on market mechanisms.

He acknowledged that the TBA policy plays a role in protecting public interests, but stressed that the government must balance it with a healthy business climate for airlines.

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Prawiraatmadja noted that the Ministry of Transport had given positive consideration to INACA’s proposal.

“We are waiting for the ministry’s response,” he said.

Earlier, Garuda Indonesia CEO Irfan Setiaputra urged the government to consider capping airfares given changes in external factors over the past five years.

He highlighted the challenges resulting from fluctuations in currency exchange rates and aviation fuel prices, which have a significant impact on operating costs.

“We are proposing greater flexibility for the TBA, taking into account external conditions,” Setiaputra stressed.

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