Aviation Fuel Prices Trigger Increases in Airfare Surcharges under Decree of the Minister of Transportation Number KM 1041 of 2026

Introduction

On May 13, 2026, the Ministry of Transportation (“MoT”) issued Decree of the Minister of Transportation Number KM 1041 of 2026 on the Surcharge Amount Caused by Fuel Fluctuations (Fuel Surcharge) for Economy Class Passenger Tariffs of Domestic Scheduled Commercial Air Transport (“MoT Decree 1041/2026”). MoT Decree 1041/2026 governs the limit of fuel surcharges that may be imposed by air transport businesses on economy class passengers of domestic scheduled commercial flights.

MoT Decree 1041/2026 was issued in consideration of the increase in aviation fuel prices and the evaluation results of Minister of Transportation Decree Number KM 83 of 2026. Based on these considerations, the Ministry of Transportation adjusted the fuel surcharge amount in accordance with fluctuations in aviation turbine fuel (avtur) prices. Through MoT Decree 1041/2026, the government seeks to maintain a balance between airlines’ operational needs and fare affordability for economy class passengers amidst fluctuations in aviation fuel prices.

Comparison

MoT Decree 1041/2026 repeals the provisions of the Decree of the Minister of Transportation Number KM 83 of 2026 on the Surcharge Amount Caused by Fuel Fluctuations (Fuel Surcharge) for Economy Class Passenger Tariffs of Domestic Scheduled Commercial Air Transport (“MoT Decree 83/2026”). The following is a comparison between MoT Decree 1041/2026 and MoT Decree 83/2026:

Key Provisions

Right of Businesses to Impose Surcharges

The FIRST Dictum grants air transport businesses the right to impose surcharges on passengers. The fuel surcharge applies to domestic scheduled commercial air transport services for the economy class service group.

Determination of Progressive Surcharge Amounts

The government permits airlines to impose surcharges on passengers due to fuel price fluctuations. The SECOND Dictum stipulates that the fuel surcharge amount is calculated based on the average fuel price determined by the aviation fuel provider. Furthermore, the THIRD Dictum sets forth the maximum surcharge percentage based on the average avtur price, among others:

1. Prices above Rp10,850 up to Rp14,200 are set at a maximum of 10%;

2. Prices above Rp14,200 up to Rp18,100 are set at a maximum of 20%;

3. Prices above Rp18,100 up to Rp21,950 are set at a maximum of 30%;

4. Prices above Rp21,950 up to Rp25,900 are set at a maximum of 40%;

5. Prices above Rp25,900 up to Rp29,750 are set at a maximum of 50%;

6. Prices above Rp29,750 up to Rp33,650 are set at a maximum of 60%;

7. Prices above Rp33,650 up to Rp37,550 are set at a maximum of 70%;

8. Prices above Rp37,550 up to Rp41,450 are set at a maximum of 80%;

9. Prices above Rp41,450 up to Rp45,350 are set at a maximum of 90%; and

10. Prices above Rp45,350 up to Rp49,350 are set at a maximum of 100%.

The FOURTH Dictum stipulates that the percentage is calculated based on the economy class passenger upper limit tariff set by the Minister of Transportation.

Implementation of Upper Limit Tariffs and Service Groups

The SIXTH Dictum stipulates that the determination of the upper limit tariff for economy class scheduled commercial air transport and the service group of each Air Transport Business Entity remains subject to the prevailing laws and regulations. Through these provisions, airlines must still comply with the applicable tariff limits and service groups in implementing the new surcharge percentages.

Inclusion in Tickets and Tax Calculation

Airlines are required to include the surcharge details on the ticket as a separate component from the basic fare as stipulated in the EIGHTH Dictum. Additionally, the surcharge amount excludes Value Added Tax (VAT) based on the SEVENTH Dictum. Airlines may also round up the total tariff paid by passengers to the nearest thousand rupiah in accordance with the NINTH Dictum.

Service Quality Obligations and Supervision

Airlines must maintain service quality in accordance with their respective service groups despite imposing a surcharge, as stipulated in the TENTH Dictum. Furthermore, pursuant to the FIFTH Dictum, the Director General of Civil Aviation is authorized to determine the implementation period of the surcharge. The Director General of Civil Aviation also conducts evaluation and supervision of the implementation of MoT Decree 1041/2026 in accordance with the ELEVENTH Dictum, while the requirement for periodic evaluations every 3 (three) months previously stipulated in MoT Decree 83/2026 has now been eliminated.

Closing

MoT Decree 1041/2026 replaces MoT Decree 83/2026 by revising the fuel surcharge scheme for domestic scheduled commercial air transport economy class passenger tariffs in line with the increase in aviation fuel prices and the results of the evaluation of the previous provisions which limited the surcharge to a maximum of 38 percent. Through MoT Decree 1041/2026, airlines may impose a surcharge on passengers based on the fluctuations in the average avtur price set by the aviation fuel provider. MoT Decree 1041/2026 also sets the fuel surcharge amount progressively ranging from 10 percent up to a maximum of 100 percent of the economy class passenger upper limit tariff, with avtur prices ranging from above Rp10,850 up to Rp49,350. In its implementation, airlines must comply with the applicable upper limit tariff and service group provisions, include the surcharge details separately from the basic fare on the ticket, and calculate the surcharge excluding the Value Added Tax (VAT) component. In addition, airlines may round up the total tariff to the nearest thousand rupiah and must maintain service quality in accordance with their respective service groups despite imposing a surcharge on passengers. MoT Decree 1041/2026 also authorizes the Director General of Civil Aviation to determine the implementation period of the surcharge and to conduct evaluation and supervision of its implementation. Considering that MoT Decree 1041/2026 took effect on the date of its issuance, air transport businesses must promptly adjust their ticketing systems, tariff calculations, and operations to ensure compliance with the prevailing provisions.