The Indonesian government has moved swiftly to mitigate the impact of soaring fuel prices on the nation’s airlines – and, at the same time, encourage domestic travel by local and international travellers.
The new policy removes value-added-tax on base fares and fuel surcharges, and applies to tickets purchased and flights taken within 60 days, starting one day after the regulation was enacted (April 24).
Indonesia’s coordinating minister for economic affairs, Harry Limanseto, said the regulation is intended to ensure “targeted, effective, and sustainable government support for the aviation sector and the wider tourism industry”.
He said to keep fares affordable, domestic fare increases would be limited to between nine and 13%.
The move is intended to heighten the appeal for domestic travel, and lure international tourists beyond hot spot Bali to domestic destinations such as Labuan Bajo, home of the Komodo National Park, the island of Sumba, Semarang in Central Java, and Ujung Pandang in Makassar.