Over the last few weeks, prices of flight tickets in Indonesia have been very expensive. The situation was made worse by the elimination of promo tickets and paid baggage policies for some airlines. The increase in airplane ticket prices is quite surprising, because the peak season has passed, which should have dropped the price of airline tickets. But in low season, the price of airline tickets is still expensive.
After the government tried to overcome this problem, the price of airline tickets began to decline. However, the public considered the price of airline tickets to be still expensive.
Aviation corporations accuse the price of airplane fuel is very high, which is the reason for rising flight ticket prices. They say that Avtur prices in Indonesia are more expensive than abroad. As a result, the price of foreign airplane tickets from Indonesia abroad has become cheaper than domestic flight tickets abroad.
Compared to Southeast Asian countries, Avtur prices in Indonesia are actually classified as competitive, the third lowest recorded after Singapore and Malaysia. Compared to the selling price of Avtur at Changi Singapore, the price of Avtur in Cengkareng is indeed more expensive at around 5 to 10 percent. However, the difference in the Avtur price is due to the imposition of Sales Tax (VAT) on Avtur by 10 percent, while the Avtur price at Changi is not subject to VAT. If it is not subject to VAT, Avtur prices in Singapore and Indonesia should be equal. In addition, since November 2018 until mid-February 2019, Avtur prices in Indonesia have tended to fall, reaching 18.5 percent. The proportion of Avtur costs of 24 percent is indeed quite significant in the formation of ticket selling prices. However, when the Avtur price dropped to 18.5%, the price of airline tickets did not decline, but instead experienced an increase during low season in early January to mid-February, the Avtur prices are assumed to unfair.
Some observers suspect that there are price cartels from several major airlines that control flights in Indonesia. So now, it is the time for the government to control the corporate actions of a number of airlines, related to the policy of eliminating promo ticket prices and paid baggage.
Indonesian Business Competition Supervisory Commission (KPPU) needs to ensure that there are no price formation cartels from certain airlines. Without the efforts of the Government and KPPU, it is difficult for the public to expect airline ticket prices, which are burdensome for consumers, to be reduced in the near future.
Budi Nugroho P.