Indonesia’s Minister of Tourism and the Creative Economy, Sandiaga Uno, announced that President Joko Widodo will soon reveal breakthroughs in continuing efforts to reduce the cost of domestic airfares.
A new policy is being formulated by the Coordinating Minister of Maritime Affairs and Investment, Luhut Binsar Pandjaitan.
Sandiaga, quoted by Kompas.com, said: “Minister Luhut is addressing the cost of airline tickets intending to announce breakthrough measures before the change of the Presidential Cabinet and the swearing in of the next government.” Sandiaga’s comments were made during a visit to the Bali International Airshow in Bali on Saturday, 21 September 2024.
Sandiaga continued, explaining that the means to reduce the cost of domestic airfares include reducing a range of taxes, including the Value Added Tax (VAT) applied to the price of air tickets, import taxes for spare parts, and the cost of aviation fuel.
Sandiaga said he hoped the reduction of taxes on air tickets, spare parts, and aviation fuel would reduce the cost of air travel by at least 10% beginning in October 2024.
Earlier, Luhut Binsar Pandjaitan admitted that he had discussions with the CEO of AirAsia, Tony Fernandes, to seek solutions concerning the high cost of aviation fuel. The high cost of aviation fuel is viewed as a dominant component in high air ticket prices in Indonesia. “Earlier, we discussed this with AirAsia, and I spoke with Tony Fernandes. We have contacted my deputy to study why our aviation fuel (avtur) is more expensive. It’s strange,” explained Luhut while attending the Bali International Airshow in Bali.
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