Indonesian authorities have decided to allow a price increase of up to 13% on domestic flights to address rising costs in the airline industry. This measure comes amid international tensions that are putting pressure on airlines.
This decision is primarily aimed at offsetting the soaring price of fuel, directly linked to the conflicts in the Middle East. Kerosene represents a significant portion of carriers' expenses, which jeopardizes their financial stability when prices skyrocket.
A sector under pressure
The government is thus seeking to preserve the viability of airlines while regulating price increases for passengers. The permitted increase remains capped, in order to prevent an uncontrolled surge in fares on domestic routes, which are essential in this archipelago of more than 17,000 islands.
As elsewhere in the world, air transport in Indonesia must adapt to an unstable environment, marked by rising costs and increased operational constraints, which could continue to weigh on prices and supply in the coming months.
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