The increase in airfares in Indonesia was the result of the rupiah`s depreciation against the US dollar that has affected the cost for aircraft maintenance and avtur, according to Vice President Jusuf Kalla.
“We know that they (the airlines) pay in dollars, buy the airplane in dollars, and buy the avtur in dollars, but the ticket price is in rupiah. Hence, there must be a gradual adjustment,” Kalla remarked at a seminar of the Association of State University Alumni Organizations (Himpuni) here on Monday.
The hike in airfares is deemed necessary to keep the airlines operating amidst the rupiah`s depreciation against the US dollar, he noted.
“If the price was not increased, maybe we can enjoy (the low price) and so will many airlines today, but tomorrow, we do not know how many airlines will collapse,” he added.
Consequently, only certain airlines will control the market in Indonesia.
“A monopoly will also cause an increase in airfares. Be careful, we have to consider that too, the interests of both consumers and the company,” Kalla pointed out.
The Indonesia National Carriers Association (INACA) has agreed to lower ticket prices in response to public complaints over the higher airfares.
The rupiah strengthened three points, from Rp14,045 to Rp14,048 against the US dollar on Monday morning`s trade.