The Indonesian government has formed a task force to address the issue of high domestic airfare prices, which have remained elevated since the COVID-19 pandemic. This initiative aims to reduce ticket prices, which are among the highest in the world, second only to Brazil, according to Coordinating Maritime and Investment Minister Luhut Pandjaitan. 

Local businesses have blamed these high prices for hampering the recovery of the country’s tourism sector. Rising aviation fuel costs and other operational factors, including tax burdens, have been identified as key contributors to the high prices. The task force will include officials from relevant institutions, such as the Office of the Coordinating Economic Minister and the Office of the Coordinating Maritime Affairs and Investment Minister. 

“Coordination meetings have already been held, and nine forward steps have been ordered, including forming the task force to reduce airfare prices,” stated Tourism and Creative Economy Minister Sandiaga Uno, as quoted by state news agency Antara. 

Luhut Pandjaitan emphasized the importance of reviewing all elements that contribute to the high prices. “We need to identify the detailed components of the cost per block hour and formulate strategies to reduce its value, based on aircraft types and flight services,” he explained. The cost per block hour includes many components such as crews, fuel, aircraft lease, and maintenance services. 

In an Instagram post, Luhut outlined several measures the government would take, including optimizing aircraft operational costs, lifting certain import restrictions, recalculating tariff formulas, evaluating cargo revenues, and offering value-added tax (VAT) cuts for priority destinations. Maintenance costs account for 16 percent of total costs, the largest share after aviation fuel, which is estimated at over 35 percent, according to the Transportation Ministry. 

“We will study all aspects to ensure a more efficient aviation industry like the ones abroad,” Sandiaga emphasized. The task force will also work on adjusting the fare calculation mechanism to better reflect airlines' operating costs per flying hour, which is expected to significantly reduce ticket prices. 

The establishment of task forces has been a common approach by the Indonesian government to tackle various national issues. These specialized teams bring together different government ministries and agencies to ensure coordinated and focused efforts in solving specific problems. This year alone, the government has set up task forces to combat illegal imports and illegal gambling, among other issues.