Indonesian President Calls For Action Over Increasing Bali Flight Prices

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Indonesian President Joko Widodo, often called Jokowi, has called for urgent action to be taken over the rapid increase in flight costs. The President has expressed his concerns that rising airfare prices will contribute to inflation and have a negative impact on the Indonesian economy. He does not want to see tourism levels drop due to costly flight tickets, nor does he want it to become more difficult for Indonesian citizens to travel domestically for work or leisure. 

Jokowi has issued orders to Minister of Transportation Budi Karya Sumadi and Minister of SOEs Erick Thohir to lower the prices of flight tickers across the board. Jokowi spoke at the 2022 National Coordination Meeting for Inflation Control on Thursday 18th August.

He said ‘In the field, I also hear complaints ‘sir the price of plane tickets has been high.‘ I have immediately reacted to the Minister of Transportation, I have ordered this to be completed immediately’. He also informed Minister Thohir to increase the capacity of the state-owned airline, Garuda Arline, as soon as possible. 

Jokowi went on to say as for ‘Garuda, I also conveyed that the Minister of SOEs would immediately add more planes so that prices could return to normal. Even though it is not easy, because international aviation fuel prices are also high’.

Minister Thohir responded that the state-owned airline can be a ‘motor’ to provide affordable air travel for Indonesian people and international visitors. Minister Thohir told the press in a statement ‘if Garuda can be more productive in the number of planes so that the reduction in ticket price stability can be balanced’. 

The Minister for Transportation, Budi Karya Sumadi, has said that the government is looking to balance the price of airline tickets against the inflation rate. He said ‘We are indeed maintaining a balance between capabilities and the transportation sector by not increasing tickets. I have told the Director General that we must talk in detail, about how we regulate prices in a detailed context so that inflation in that sector is not too high’. 

Minister Sumadi further explained how a subsidy from the government would work in practice ‘If there is a subsidy, they help market [flights] until the occupancy increases, and the price will be maintained. The price is directly proportional to the occupancy and there are many areas where the occupancy is low on certain days, this must be managed’.

This news from the Presidential Palace in Jakarta comes just days after Bali’s Deputy Governor Cok Ace, told reporters that he was calling directly on the central government to subsidize flights to Bali. According to the Deputy Governor, flights from Australia to Thailand are cheaper than flights from Australia to Bali, and this would have a negative impact on Bali’s tourism economy. 

Speaking at the Recover (Bali) Together: Awaiting Solutions for Business Continuity and Recover panel earlier this week Deputy Governor said ‘These expensive tickets are for tourists, we are working hard to improve the destination and provide the best service’.

He asked that if other countries could provide affordable international flights, and even subsides, why could Indonesia not do the same? It seems that his request has been heard by the Presidential Palace and work is now underway to make sure that flight prices for international travel to Indonesia, especially Bali, remain as affordable as possible while taking into consideration rising fuel prices. 

Some commentators online have suggested that scrapping the fee for the tourist visa on arrival would be a more impactful way to incentivize international visitors to Bali. For many years the 30-day visa on arrival was free for travelers from dozens of countries, if travelers wanted the option to extend the visa then they needed to pay. Now it is the case that the visa on arrival is available for travelers from 75 nations and costs IDR 500,000 for 30-days and is eligible for a one time extension of 30-days with an additional fee.