Proper Reaction of the Government, Overcome Negative Impacts of Increase in Flight Service Rates
By: Abdul Aziz *
Now, there are many sectors that depend on the world of aviation, say tourism, shipping services, hospitality, tourism and of course the community itself with its various interests. So, when there is a policy of increasing flight fares and applying paid baggage, it is certainly burdensome to those interested groups.
As a result, the airport is lonely with passengers because people are unable to reach the air transportation financially. Hundreds of thousands of flights have been canceled because they did not meet the minimum quota so as not to lose money. Various shipping services may experience stagnation. Damri, also indirectly received the negative impact of the flight tariff increase. So, the choice of increasing prices along with applying paid baggage began to have a negative impact on the world of aviation and national economic development.
Fortunately, the Government through the direction of President Jokowi acted quickly to respond to this situation. Until finally PT Pertamina made adjustments to the avtur selling price that took effect on February 16, 2019 starting at 00.00 WIB. Pertamina’s Media Communication Manager, Arya Dwi Paramita, explained that the decline in Pertamina’s avtur price was the result of the implementation of the avtur price formula listed in the Minister of Energy and Mineral Resources (ESDM) Decree Number 17 of 2019 concerning the Basic Price Formula in Calculating Retail Prices. Which Is Distributed Through Aircraft Filling Depots.
The adjustment has been made by considering the average world oil prices, the rupiah exchange rate and other factors. The price of avtur for each airline is based on the agreement of the parties, namely between Pertamina as the provider and airline as the consumer. The decline in avtur prices is a form of Pertamina’s support for the national aviation industry, which is also expected to have an impact on other industries.
The impact of the decline in airplane fuel prices has become very significant, because the form of a decrease in the cost component will certainly have a positive impact on airlines. Two days earlier, Garuda Indonesia Group announced a reduction in the price of airplane tickets across all flight routes by 20 percent. PT Garuda Indonesia (Persero) Tbk (GIAA) President Director Ari Ashkara said this was in line with the aspirations of the people and a number of national industry associations and the direction of the President of the Republic of Indonesia regarding the reduction in flight ticket rates in supporting efforts to improve the national economic sector. Especially to support the growth of the tourism sector, MSMEs, and other national industries, considering that air transportation services play an important role in supporting economic growth.
We know that Garuda Indonesia Group has full service Garuda Indonesia services and low cost carrier (LCC) Citilink Indonesia and Sriwijaya Air-NAM Air Group. If Garuda makes a tariff adjustment through price reductions, other flights should be followed because Garuda is the main flight or as a market leader. The decision of the BUMN airline will be followed by other airlines.
The quick reaction of the Jokowi Government in responding to the impact of losses from tariff increases should be appreciated. Following the President’s direction, Pertamina and Garuda as BUMN have lowered the price of airplane fuel and decided to reduce the price of airplane tickets which will have an impact on the prices of other airline tickets. The BUMN, as a government instrument, has implemented policies that create justice and prosperity for the community by considering the interests of consumers. Through the reduction in flight ticket rates, we hope that public access to air transportation services can be more open and supportive of national economic growth.
*) The author is a Political Student, one of the College in Jakarta