Inaca Apply for 40 Percent Limit Tariff Adjustment

By : Herry Barus And Aldi Firhand. A | Tuesday, May 29 2018 - 19:50 IWST

Visitors observed the aircraft owned by the airline PT Garuda Indonesia at Garuda Indonesia Travel Fair (GATF) 2017 in DI Yogyakarta, Friday (10/3). (ANTARA / Andreas Fitri Atmoko)
Visitors observed the aircraft owned by the airline PT Garuda Indonesia at Garuda Indonesia Travel Fair (GATF) 2017 in DI Yogyakarta, Friday (10/3). (ANTARA / Andreas Fitri Atmoko) - Jakarta - The Indonesian National Aviation Company Association (Inaca) has submitted a lower tariff limitation of 40 percent of the upper limit tariff to the Ministry of Transportation following the increase in fuel prices for aviation aircraft that currently has reached 40 percent.

Chairman of Inaca Pahala N Mansury said both from Inaca and Garuda Indonesia Airlines have submitted the limit adjustment since mid-2017.

"Now the lower limit rate of 30 percent of the upper limit rate, we expect to be re-adjusted again as before 40 percent of the upper limit rate," said Pahala in his presentation in Jakarta, (28/5).

The reward describes 90 percent of the expenditures made in US dollars, and 30 percent of the operational cost is for the purchase of aviation fuel. Thus, the current increase in operating costs reaches 17 percent with a currency depreciation of four to five percent.

"Our expenditures are almost all in dollars, while the revenue in rupiah, so it is not balanced, last year the price of aviation was 29 percent lower, now 12 percent more expensive," he said.

Currently, Pahala said it is hoping and awaiting the results of the study and evaluation of the government for the submission of the rate increase. However, he added, for this festive season Eid, still use the old rates.

Previously, the Director General of Air Transportation of the Ministry of Transportation, Agus Santoso, will not review the lower tariff hike since it is still waiting for fuel price trends and fluctuations in the rupiah against the US dollar for the next three months.

"We wait until the 10 percent increase, then we evaluate," he said.

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