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Market Chatter: Indonesian Airlines to Raise Fares By Up to 13% as Fuel Prices Soar

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Indonesia's local airlines have welcomed the government's decision to allow airfares to rise by between 9% and 13% as surging jet fuel prices, driven by the Middle East conflict, continue to increase operating costs, The Jakarta Post reported Tuesday.

Garuda Indonesia (IDX:GIAA) said it will adjust ticket prices in line with the new transport regulation, describing the move as necessary to balance airline financial stability with public access to air travel, reportedly.

However, industry experts warned that higher fares could weigh on passenger demand, even as the government has set aside 2.6 trillion Indonesian rupiah to fund a VAT waiver on tickets and keep fare increases within the aforementioned range, the news outlet said.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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