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Business Insight

Passenger anger ends up biting Indonesian airlines

Government trims cap on maximum fares by up to 16% as holidays approach

Domestic airfares in Indonesia have remained high since the Christmas holiday period last year.   © Reuters

In Indonesia, the world's fifth largest aviation market, domestic airlines have been forced to cut their prices due to an outcry about accelerating fare hikes, as Indonesians make plans for the upcoming Eid al-Fitr Islamic holidays.

The Ministry of Transportation last week announced that it had lowered the maximum fare for domestic flights by 12% to 16%. The change took effect over the weekend.

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