Ticket Prices Go Down, Pessimistic

Reportage: Yohanes Clemens

ECONOMIC Growth of Central Sulawesi Province in the first quarter of 2019 grew by 6.77 percent. But this growth experienced negative growth (contraction) 0.99 percent when compared to the previous quarter (q-to-q).

While inflation in Central Sulawesi at the end of the first quarter of 2019 is estimated to be in the range of 3.2 percent to 3.6 percent. This figure is quite high because controlling inflation after a disaster is not easy. The cause of inflation is the price of airplane tickets and food which rose very high after the disaster.
The central government has decided to reduce the flight ticket tariff (TBA) to 12-16% on May 15 2019. This is expected so that the price of airline tickets can immediately drop.

However, the Indonesian Consumers Foundation (YLKI) is pessimistic that the government intervention will be able to reduce airplane ticket prices. "The percentage reduction in TBA will not automatically reduce the price of airplane tickets. It is only on paper," said YLKI Chairperson Tulus Abadi in a press release, Jakarta, Tuesday (05/14/2019).

Because, all airlines have implemented high tariffs, on average above 100% of the lower limit rates. Thus, the decline in TBA will not be able to erode the high price of airplane tickets and will not be able to restore the phenomenon of cheap airplane tickets.

Supposedly, said Tulus, the government also issued a supporting policy, namely by reducing the current VAT tariff of aircraft by 10%. Thus the government is fair and not just pressuring the airline. On the other hand the government does not want the potential income from the VAT to decrease.

Separately, economic observer at Tadulako University, Muhtar Lutfi, assessed that one of the factors that played a major role in slowing economic growth was the increase in airline ticket prices.

"From the negative side, the price of expensive airplane tickets will cause a decrease in passenger air transport users, impacting on the tourism sector, hotel occupancy rates decline," said the Untad Dean of the Faculty of Economic, Tuesday (05/14/2019).

This, too, said Muhtar, affected online businesses that use cargo services in shipping goods and other domino effects.

"Positively, many prospective passengers divert their travel plans, especially for short distances on land transportation such as buses, trains and sea transportation, especially the PELNI ship. "If you measure between the impact of the increase in ticket prices which is greater, the negative side is far greater than the positive side," he said. **

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