Saturday, 20 Safar 1441 / 19 October 2019

Saturday, 20 Safar 1441 / 19 October 2019

Aviation industry regulations to be revised to help airlines

Selasa 22 Jan 2019 04:04 WIB

Red: Reiny Dwinanda

Transport Minister Budi Karya Sumadi

Transport Minister Budi Karya Sumadi

Foto: Republika/Dedy D Nasution
The existing aviation industry regulations are considered to have been a burden.

REPUBLIKA.CO.ID, JAKARTA -- The Indonesian government has strived to revise the commercial aviation industry regulations. The rules are considered to have been a burden for airlines and aviation industry, in general, according to Minister of Transportation Budi Karya Sumadi.

"We are ready for a deregulation to help the airlines industry," Sumadi stated here on Monday.

He mentioned that the Ministry of Transportation will cooperate with a number of parties and related stakeholders for an initial review on commercial aviation industry regulations. The plan to review the regulation was made following an emerging polemic related to the recent increase in the cost of commercial aircraft services, particularly domestic flight cost.

The cost increase has indeed been burdensome to the customers. On the other hand, the airlines is also facing difficult financial condition due to rising avtur (aircraft fuel) prices, which happened at the same time with the weakening of rupiah exchange rate against US dollar.

Director General of Air Transportation of the Transportation Ministry Polana B Pramesti earlier mentioned that Regulation No.14 of 2016, concerning formulation mechanisms for calculation and determination of limits on domestic flight fares, had not been revised since 2016.

In fact, Pramesti remarked that the regulation can actually be revised under certain circumstance, such as an unconducive business climate which, in this case, was caused by rising fuel price and weakening exchange rate.

"The fuel price has already reached its cumulative increase of up to 70 percent, and it is possible for us to do some deregulation to help the business to adjust to the current situation," Pramesti explained.

Pramesti further revealed that the exchange rate of rupiah against US dollar, which has weakened by around 30 to 40 percent, from Rp11 thousand to Rp15 thousand per US dollar, has also become a burden on the aviation industry.

The Ministry of Transportation has submitted the proposal of Indonesian National Aviation Company Association (Inaca) to the Coordinating Ministry of Maritime Affairs to raise the lower limit on domestic flight fares by five percent, which is from 30 percent to 35 percent. However, the proposal is yet to be reviewed.

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