This content is from: Local Insights

Indonesia: Airport tax concerns addressed

Oene MarseilleEmir Nurmansyah
As of March 1 2015, anyone flying out of Indonesian airports will no longer need to shell out for the passenger service charge (more popularly known as airport tax). The charge will have already been included in the price of the airfare.

The Indonesian director general of air transportation issued Regulation 12 of January 23 2015 addressing this matter. Regulation 12 was amended a month later by Regulation 59 (February 24 2015), but the core change was retained. Article 3, which states that passenger service charge will be assessed and added to the price of the airline tickets sold by the airline, was kept unchanged.

Several categories of passengers are exempted from having to pay the passenger service charge. These passengers include: transiting passengers; on-duty air crews; children or infants not occupying a seat; visitors of the state in official business; passengers diverted from their stated destinations; or, passengers on delayed flights.

In practice, under the new regulation, the airlines will pay the passenger service charge directly to the airport authority. Previously, Garuda Indonesia and several other airliners have included the charge in its ticket price and remitted the amount to the airport authority. In October 2014, it reversed its decision because no airlines followed suit with the practice in the absence of a government regulation mandating such change. President director of Garuda, Emirsyah Satar, complained that the passenger service charge in Garuda's ticket prices created an illusion that Garuda's prices were higher than other airlines that had continued to require passengers to pay the charge at the check-in counters.

The new regulation helps to alleviate that concern.

Oene Marseille and Emir Nurmansyah

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