Public Perception of Domestic Airfares Takes Centre Stage at IAA’s Inaugural Aviation Club

on 21 August 2026, The Indonesia Aviation Association (IAA) held its inaugural Aviation Club gathering bringing together aviation professionals and industry stakeholders to discuss one of the most frequently debated issues in Indonesian aviation: the perception of high domestic airfares.

8/21/20263 min read

PRESS RELEASE

Public Perception of Domestic Airfares Takes Centre Stage at IAA’s Inaugural Aviation Club

JAKARTA, Indonesia – The Indonesia Aviation Association (IAA) held its inaugural Aviation Club gathering on 21 August 2026, bringing together aviation professionals and industry stakeholders to discuss one of the most frequently debated issues in Indonesian aviation: the perception of high domestic airfares.

The session, themed “The Phenomenon and Public Perception of High Domestic Airfares,” was led by Mr. Alvin Lie, Head of the Association for Air Transport Service Users (APJAPI) and an IAA member.

Public perception does not necessarily reflect passenger experience

Mr. Alvin highlighted the widespread perception among the Indonesian public that domestic airfares are “too high”. However, findings from an APJAPI survey suggest that public perception may not fully reflect the actual experience of domestic air travellers.

The survey, conducted among a random selection of domestic travellers at Indonesia’s five busiest airports, found that only 23% of respondents considered domestic airfares to be “expensive” or “too high”. The majority considered fares to be either “reasonable” or “cheap”.

According to Mr. Alvin, the finding highlights a potential gap between the broader public narrative surrounding domestic airfares and the views of passengers who actually use domestic air services.

Limited fare flexibility and the challenge of seasonal pricing

A key issue discussed during the Aviation Club was the impact of the regulated domestic fare framework, including the upper and lower fare boundaries (TBA and TBB), on airlines’ ability to adjust fares in response to changing market conditions and operating costs.

According to Mr. Alvin, the current framework can limit airlines’ pricing flexibility, particularly as operating costs continue to evolve. This may result in a narrower range of fare differentiation between high and low-demand periods.

As airlines need to maintain financial sustainability, fares may consequently remain relatively close to the applicable upper fare ceiling on certain routes, while the scope for offering significantly lower fares during low-demand periods may be constrained.

The issue applies to domestic Economy Class fares, while Business Class fares and international flights to and from Indonesia are not subject to the same fare-ceiling mechanism.

Mr. Alvin also pointed to a number of external factors affecting the cost and perception of air travel, including airport charges, fuel prices and broader geopolitical developments. Rising input costs can further reduce the flexibility available to airlines within the existing fare framework.

Multiple factors shape perceptions of airfares

The Aviation Club discussion identified several factors that influence how passengers perceive the affordability of air travel, including:

The necessity and frequency of travel
Passengers’ willingness and ability to pay
The availability and competitiveness of alternative modes of transportation
Comparisons with airfares in other countries
The quality and value of airline services
Statements and commentary from public officials and public figures on social media
The availability, or lack, of lower fares during low-demand periods
Memories of unusually low airfares offered during the COVID-19 pandemic

The discussion also noted that misinformation and incomplete information circulating on social media can contribute to public perceptions that may not always reflect the broader market situation.

Call for greater flexibility in the fare framework

Despite the APJAPI survey findings, participants at the Aviation Club agreed that there is a need to reconsider how domestic fare ceilings are implemented and to explore greater flexibility within the existing framework.

IAA members and aviation professionals highlighted the importance of creating sufficient financial headroom for airlines while ensuring that domestic air services remain affordable and accessible to the travelling public.

The issue is particularly relevant to low-cost carriers (LCCs), which generally do not operate a Business Class product and therefore have fewer opportunities to generate additional revenue.

Rather than viewing domestic airfares solely through their nominal ticket value, the discussion emphasised the need to consider the broader relationship between affordability, airline cost structures, market conditions and the long-term financial sustainability of the aviation industry.

A holistic approach to the airfare debate

“The issue of high airfares should not be seen solely from the nominal value of the ticket. The perception that exists is the result of numerous factors, including changes in price structures, jet fuel costs, fuel surcharges, VAT, airport fees, geopolitical situations, airline cost structures, and the information that reaches the public through social media,” said Mr. Alvin Lie.

“On the other hand, the survey results show that the majority of air service users still rate airfares as ‘reasonable’, even though price remains a major consideration when passengers choose an airline. Therefore, the issue of airfares needs to be viewed holistically, taking into account both affordability for passengers and the financial sustainability of airlines, so that Indonesia’s aviation industry can continue to provide affordable, safe and sustainable air services.”

The inaugural Aviation Club reflects IAA’s commitment to providing a platform for constructive dialogue among aviation professionals, industry stakeholders and policymakers on issues that are important to the continued development of Indonesia’s aviation ecosystem.

For more information, please contact:

Indonesia Aviation Association (IAA)
Tel: +62 811 1200 077 | +62 21 3825 0524
Email: indonesiaaviation.assc@gmail.com

About Indonesia Aviation Association (IAA)

Indonesia Aviation Association (IAA) is a national association that brings together aviation experts, professionals, institutions, and industry stakeholders. IAA serves as a strategic partner and source of insight for both the aviation industry and government in strengthening Indonesia’s aviation ecosystem.