May 7, 2019 / 6:05 AM / 17 days ago

Indonesia looks to cut air ticket prices for Ramadan-ending festival

JAKARTA, May 7 (Reuters) - Indonesia’s chief economics minister has ordered transport authorities to cut airline ticket prices ahead of the country’s biggest festival that concludes the Muslim holy month of Ramadan, a government website said.

High airfares have provoked public outcry from early this year and have stayed high, inspite of the government’s February calls for airlines to cut prices.

The high prices have weakened the appetite for air travel and fed inflation. Lower household spending on travel and accommodation has partly contributed to slower growth than expected in Southeast Asia’s largest economy, a rate of 5.07 percent in January-March.

Chief Economics Minister Darmin Nasution has ordered the transport ministry to adjust the range of rates before the Eid al-Fitr festival, an article on the website of the cabinet secretary’s office said.

“High ticket prices have troubled the people, especially facing the homecoming season (ahead of Eid)”, the article said, attributing the sentiment to Nasution.

Millions of Indonesians make lengthy trips to their hometowns to celebrate the festival with their families every year.

“For something that concerns the benefit of a wider community, rules cannot be solely based on business and market matters,” the article added.

It did not mention the size of the cuts, however.

The transport ministry will hold public consultations on Nasution’s request, the article quoted Transport Minister Budi Karya Sumadi as saying.

“I can set up a new ceiling for retail price, but it will depend on fuel prices,” Sumadi said.

Rini Soemarno, the minister for state-owned enterprises, said she would order national energy firm Pertamina to review jet fuel costs to help cut airline costs.

National carrier Garuda Indonesia will comply if the regulator trims ticket prices, Soemarno added.

Last month, Pertamina said its jet fuel inventory had jumped after a drop in air travel, but it expected consumption to pick back up during Ramadan and the Eid festival early in June. (Reporting by Gayatri Suroyo; Editing by Clarence Fernandez)

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