JAKARTA – The government is considered to have to review regulations in the aviation industry instead of inviting foreign airlines to compete to create lower ticket prices.
Flight observer Alvin Lie said that the operation of foreign airlines in the country is not a solution to the problem of airline ticket prices which are considered expensive. The government needs to think about the main root causes of the national aviation industry.
“The government needs to review policies and regulations. If the flight rules are profitable, there is no need to invite foreign airlines to enter the Indonesian market by themselves,” Alvin said on Wednesday (06/19/2019).
He said, airlines need to be given some kind of incentives or relaxation rules to support operational performance, so that they can have an impact on affordable prices. However, these incentives are better given to airlines that are currently operating.
Providing convenience, he continued, is not only intended for jet-engined airlines, but also propeller engines. Propeller aircraft, both regular and pioneer routes, are operated more and serve local and remote community transportation.
Alvin assessed that parts of Indonesia which are islands are often dependent on air transportation because they have no other alternative. However, so far the government is considered likely to favor the jet-engined aircraft that are widely used by the city community.
One example is the reduction in TBA and raising TBB only for jet-engined airlines. However, the impact on ticket prices is also not optimal.
Alvin called the ticket price which is now the minimum price for the airline to make a profit. The airline also cannot cross subsidies so that prices can be low during low season because of the lowered TBA.
“In the past, the airline at Lebaran could raise prices to close to TBA and reduce it to near the carrying limit during low season. So people can still get cheap tickets,” he said.
According to him, the more the government decreases TBA, the ticket prices will tend to be stagnant. If TBA is increased, it can provide space for the airline to set a very low price, but at a certain time it can also be expensive.
The current rules, assessed, are not enough to attract foreign airlines. In fact, it has knocked down several national airlines and only has a few left, so many people consider there is a practice of duopoly.