Domestic Holidays Could Be Cheaper as Government Prepares Flight Ticket Incentives

Sunday, 26 April 2026 | 11:01

Author: Respaty Gilang

Illustration of cheap flight tickets.
Source: Freepik

Summary

1. The government covers VAT and fuel surcharges for domestic economy class flight tickets.

2. Domestic ticket price hikes are capped at a maximum of 13%.

3. This policy remains effective for 60 days to preserve public purchasing power and bolster the tourism sector.

Holiday Plans within the country can now breathe a little easier amidst rising Air Travel costs. The government has officially prepared a number of incentives to curb the surge in domestic air ticket prices, especially for economy class passengers who have recently started to feel the burden due to rising aviation turbine fuel (avtur) prices.

This step is a breath of fresh air for travelers who regularly commute between cities or islands. Moreover, plane tickets are often the largest cost component when planning domestic holidays to various Favorite Destinations in Indonesia.

One policy prepared by the government is to cover the Value Added Tax (VAT) on the base fare and fuel surcharge for domestic economy class flight tickets. This policy is expected to suppress ticket prices to keep them affordable even though Airline operational costs continue to rise.

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"Through this policy, the burden of ticket prices paid by the public can be reduced even though airline operational costs increase due to rising avtur prices," said Haryo Limanseto, spokesperson for the Coordinating Ministry for Economic Affairs, in a written statement, Saturday, April 25, 2026.

This policy is stipulated in Minister of Finance Regulation (PMK) Number 24 of 2026. In addition to providing tax incentives, the government has also limited the maximum increase in domestic air ticket fares to 13 percent to maintain public purchasing power and support the mobility of Domestic Tourists.

For the Tourism industry, this policy is a strategic step. More stable air ticket prices are believed to help maintain public interest in Traveling, especially to popular Tourist Destinations that rely on flight access.

Interestingly, avtur is said to contribute around 40 percent of an airline's total operational costs. That's why every increase in aviation fuel prices almost always has a direct impact on the ticket prices paid by passengers.

This incentive is valid for 60 days starting one day after the regulation is officially enacted. The policy covers both ticket purchases and flight schedules within the period specified by the government.

For travelers who have planned a domestic Holiday in the near future, this incentive period could be the right moment to hunt for tickets at more friendly prices before fares readjust again.

Quick Answer

Indonesia Caps Domestic Flight Prices with VAT and Fuel Surcharge Incentives

The Indonesian government is implementing incentives to reduce domestic economy flight costs by covering VAT and fuel surcharges while capping price increases at 13%. These measures last 60 days to maintain affordable travel and support tourism.

Government covers VAT and fuel surcharges for domestic economy class tickets
Maximum 13% cap imposed on domestic flight price increases
Policy effective for 60 days after regulation enactment
Aims to preserve public purchasing power and boost tourism sector
Addresses rising aviation fuel costs impacting ticket prices

Domestic travelers in Indonesia will see reduced flight costs as the government implements new incentives to counter rising airfare prices. Economy class passengers specifically benefit from measures addressing increased aviation turbine fuel expenses that impact ticket affordability for holiday travel.

These policies provide significant relief for frequent inter-island travelers and vacationers, particularly since airfare often constitutes the largest expense when visiting Indonesia's popular destinations. The combination of financial assistance and price controls aims to maintain tourism momentum despite operational cost pressures on airlines.

VAT and Fuel Surcharge Coverage

Through Minister of Finance Regulation Number 24 of 2026, the government will absorb Value Added Tax on base fares and fuel surcharges for domestic economy tickets. This intervention directly reduces passenger costs even as airline operational expenses rise. Haryo Limanseto of the Coordinating Ministry for Economic Affairs confirmed this approach helps "reduce the burden of ticket prices paid by the public" during periods of aviation fuel inflation.

Price Increase Limitations

Complementing the cost coverage, authorities have imposed a strict 13% ceiling on domestic airfare increases. This dual strategy of financial support and regulatory control preserves passenger purchasing power while ensuring mobility for domestic tourists. Given that aviation fuel represents approximately 40% of airline operating costs, these measures directly counteract fuel price fluctuations that traditionally translate to higher ticket prices.

Tourism Sector Impact

The 60-day incentive period creates immediate opportunities for travelers planning domestic holidays. Airlines must apply these provisions to both ticket purchases and flight schedules falling within the effective dates. For destinations relying heavily on air access, stable ticket pricing helps sustain visitor interest and supports tourism industry recovery during periods of economic pressure.

Travelers with upcoming domestic holiday plans can take advantage of this temporary pricing relief before fares potentially adjust after the incentive window closes. The targeted duration balances immediate consumer relief with long-term industry sustainability concerns.