Domestic Airfares in Indonesia Set to Rise Amid Fuel Surcharge Hike

TheIndonesia.co - Domestic air ticket prices are set to increase by 9 to 13 per cent in the near future. This policy follows the issuance of Minister of Transport Decree (KM) Number 83 of 2026, which regulates adjustments to additional cost components (fuel surcharge) for domestic economy-class passenger fares.

Despite the fare increase, the government has also introduced a stimulus in the form of a Government-Borne Value Added Tax (VAT) of 11 per cent, aimed at maintaining public purchasing power amid fluctuating global jet fuel prices.

In response to this, state-owned airline Garuda Indonesia has stated its readiness to adjust ticket prices. The company’s President Director, Glenny Kairupan, confirmed that any adjustments will be made while still considering public accessibility.

“Garuda Indonesia will adjust ticket prices proportionately and in a measured manner, while upholding the principles of prudence, transparency, and compliance with regulatory requirements,” Glenny said in an official statement on Wednesday (8 April 2026).

Glenny added that the airline will continue to conduct regular evaluations, as jet fuel prices are highly dynamic and strongly influenced by global geopolitical conditions. As a mitigation measure, Garuda is reviewing the optimisation of flight frequencies and schedules on several routes to maintain operational sustainability.

“This policy is a strategic step in maintaining a balance between the airline’s operational sustainability and the accessibility of air transport services for the public, while also supporting the stability of the national aviation ecosystem,” he explained.

For context, the fare increase is driven by a 38 per cent rise in fuel surcharges for both jet and propeller aircraft. However, to mitigate the impact, the government has introduced an 11 per cent VAT incentive applicable to scheduled domestic commercial flights in the economy class.

In addition, the government has also provided a 0 per cent import duty incentive for aircraft spare parts. This policy is expected to strengthen the competitiveness of the Maintenance, Repair, and Overhaul (MRO) industry in the country, as well as reduce maintenance costs for national airlines.