THE INDONESIAN government is evaluating a proposal by the Indonesia National Air Carriers Association (INACA) to scrap the maximum airfare price (TBA) policy and adopt a market-based system.

“The government is studying it,” Secretary General of Air Transportation, Sigit Hani Hadiyanto, stated during the Indonesia AERO Summit 2024 in Jakarta recently.

However, Hadiyanto did not elaborate further on the evaluation conducted by the government.

On the same occasion, INACA Chairman Denon Prawiraatmadja expressed hope that the government would implement a policy allowing airfare prices to be determined by market mechanisms.

He acknowledged the TBA policy’s role in protecting public interests but emphasized the need for the government to balance that with a healthy business climate for airlines.

Denon remarked that the Ministry of Transportation has received INACA’s proposal positively. We await the ministry’s response.

Earlier, Garuda Indonesia’s CEO, Irfan Setiaputra, urged the government to review the airfare price limits, considering the changes in external factors over the past five years.

He highlighted the challenges posed by fluctuating exchange rates and aviation fuel prices, which significantly impact operational costs.

“We propose greater flexibility for the TBA, considering external conditions,” Irfan emphasized. [antaranews/photo special]