Govt. Updates Upper Thresholds for Domestic Economy-Class Flights

The Minister of Transportation (“Minister”) has issued Ministerial Regulation No. PM.14 of 2016 on the Mechanism for Formulating Upper- and Lower-Tariff Thresholds for Economy-Class Passengers on Scheduled Domestic Commercial Flights (“2016 Regulation”).The 2016 Regulation redefines the upper and lower thresholds for fares that may be charged by airline companies to their economy-class passengers due to fluctuations in the price of aviation fuel and the rupiah exchange rate against the US dollar. [1] Prior to the 2016 Regulation, this matter was regulated under Ministerial Regulation No. PM.126 of 2015 (“2015 Regulation”). [2] The 2016 Regulation is of relevance to all airline companies and to the flying public.Tariff ComponentsFlight tariffs payable by consumers vary from route to route, depending on the distance of the flight, the type of aircraft used (jet or propeller), and the total number of passenger seats on a given aircraft (<30 seats or >30 seats). A tariff comprises of the following components: [3]