LCC to cut airfares by 50 percent starting on July 4

TRANSPORTATION BUSINESS - JAKARTA. Low-cost carriers (LCC) have agreed to cut airfares to 50 percent of the price ceiling (to be announced, starting on Thursday for domestic flights in response to the government’s effort to push down the price of plane tickets.

“We are committed to providing affordable flights. The flight schedules and cost sharing [plan] will be discussed in the next coordination meeting,” Secretary to the Coordinating Economic Minister Susiwijono Moegiarso said in Jakarta on Monday.

The agreement was made during a coordination meeting attended by aviation industry stakeholders on Monday.

Susiwijono said the price cut would apply to flights departing on Tuesday, Thursday and Saturday between 10 a.m. and 2 p.m. (local time) in accordance to the location of the airport.

“The discount is allocated for certain seats based on the total seats of the airplanes,” he said, adding that airlines, airports, fuel suppliers and state-owned air navigation firm AirNav Indonesia would contribute to covering the cost difference, he added.

Meanwhile, State-Owned Enterprises (SOEs) Ministry finance, survey and consultancy business deputy Gatot Trihargo assured the cost sharing policy would not affect flight safety.

“The state-owned enterprises [involved in the policy] will not be burdened too much by the policy.”

Susiwijono said since the latest coordination meeting, LCC airfares had decreased by 11 percent in average. The airfares of Lion Air had decreased by 42.7 percent of the price ceiling and the airfares of AirAsia had dropped 38.3 percent of the price ceiling.