Factors Driving High Airfare Costs and Fuel Prices in Indonesia

The Commission for the Supervision of Business Competition (KPPU) has identified issues in the sale and distribution of aviation fuel, which is believed to be a contributing factor contributing to the high prices of domestic airline tickets.

Rayful Mudassir

7 Feb 2024 - 21.23
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Factors Driving High Airfare Costs and Fuel Prices in Indonesia

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Bisnis, JAKARTA – The Commission for the Supervision of Business Competition (KPPU) has identified issues in the sale and distribution of aviation fuel, which is believed to be a factorcontributing to the high prices of domestic airline tickets.

The high cost of aviation fuel remains a primary driver for the steep prices of flight tickets within Indonesia. Fuel expenses constitute 38% - 45% of the total cost for each flight.

According to the findings of the KPPU investigation, the price of aviation fuel in Indonesia remains higher compared to that in 10 foreign airports.

The disparity between the price of aviation fuel in Indonesian airports and foreign counterparts typically ranged from 22% to 43% during December 2023. Consequently, the cost of aviation fuel is deemed to exert a direct influence on the pricing of airplane tickets.

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