Indonesian Government Introduces Measures To Reduce Bali Flight Costs 

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The Indonesian Government has confirmed that it is taking steps to reduce the cost of flights in and out of the country, including for tourism hotspots like Bali.

The Minister for Investment and Maritime Affairs, Luhut Binsar Pandjaitan, has told the press that he is preparing aviation efficiency measures to reduce flight costs. 

In a statement issued on his social media account Minister Pandjaitan explained “We are preparing several steps for flight efficiency and reducing ticket prices, for example evaluating aircraft operating costs.”

He explained that the Cost Per Block Hour (CBH) is the most expensive element of an aircraft’s operating costs, and he feels this needs to be assessed in order to identify ways in which it can be reduced. Minister Pandjaitan said, “We are also formulating a stagey to reduce the CBH value, based on the type of aircraft and flight service.”

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Minister Pandjaitan also outlined how the government plans to accelerate new policies that will exempt import duties, opening prohibitions, and restrictions on imported goods for use in the aviation sector. This is another element that is adding huge costs for airlines, which are directly transited into ticket costs. 

Minister Pandjaitan added, “The maintenance portion is 16% of the total [costs] after aviation fuel.” He is keen to find ways to reduce costs from all angles.

Minister Pandjaitan went on to say, “Compared to ASEAN countries and the high population countries, Indonesia’s flight ticket price will be the second most expensive after Brazil,” something that he wants to see changed as quickly as possible as it is having an impact on both domestic and international tourists.

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He did not give a timeline as to when all these issues would be resolved but confirmed that the National Air Transport Ticket Price Supervision Committee assesses the price of plane tickets every month. 

Speaking in June, the Director of Marketing at the Ministry of Tourism and Creative Economies, Dwi Marhen Yono, said, “The price of our aviation fuel is still not competitive,” as he confirmed that the reduction in the number of aircraft fleets and aviation fuel is causing the cost of domestic flight tickets to increase. 

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The rising cost of domestic flight tickets impacts both domestic and international tourists.

Not only do higher domestic flight tickets discourage international tourists from exploring other regions of Indonesia, but they also make it harder for long-haul visitors to travel to Indonesia.

Tourists who are unable to secure a direct flight from their city of departure to Bali will have to take a layover on their way to Denpasar.

For many people, Jakarta is a convenient layover destination, but with domestic tickets increasing in price, it is often more affordable to arrange a layover in cities in other countries, like Kuala Lumpur in Malaysia, Bangkok in Thailand, or Singapore.

Yono confirmed last month that Minister Pandjaitan would be holding talks with the fuel company Pertamina to evaluate the situation and help bring fuel costs down for airlines. 

Despite the rising cost of flights in Indonesia, Bali’s I Gusti Ngurah Rai International Airport has confirmed that six major international airlines are bidding for increased flight routes starting in October 2024.

In an interview with the media on the 2nd July 2024, the General Manager of PT Angkasa Pura I International Airport I Gusti Ngurah Rai, Handy Heryudhitiawan, said, “We are open with any airline; anyone wants to fly here, please.”

“The important thing is that the time slot is still available, and our capacity is in accordance with the type of aircraft that will be used.”

As Bali Airport has already seen over 11 million passengers so far this year, it’s clear that demand for travel in Bali is to rise, and the island is on track to smash tourism targets by the end of the year.