When Resti Novita Sari booked to fly from Jakarta to her hometown of Padang to v...
SINGAPORE/JAKARTA - When Resti Novita Sari booked to fly from Jakarta to her hometown of Padang to visit family for the Eid holiday, airfares were 40% to 60% higher than she had paid in previous years.
Soaring domestic ticket prices in the world’s fifth-biggest domestic aviation market, now a duopoly, led the government in May to order Garuda Indonesia and Lion Air to lower fares. That has stifled the domestic hospitality industry, data shows, with hotel occupancy rates down as much as 30% in the country’s east.
The maximum fine for price setting is 25 billion rupiah per party per case. Garuda and Lion did not respond to requests to comment on the allegations. “We wanted to optimize capacity,” Garuda Finance Director Fuad Rizal told Reuters, declining to comment further. The data showed that despite the capacity cut, its planes were on average less full than the previous year.The high cost of flights has broader consequences for the Indonesian economy, which expanded by 5.07% in the first quarter, missing expectations.
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