Passengers flying with Garuda Indonesia will have to pay the passenger service charge (PSC), known as the airport tax, separately at the airport as the national flag carrier will remove the tax from its ticket price starting on Oct. 1.
Garuda was lauded in 2012 when it pioneered efficiency by including the airport tax in its ticket prices. After two years, however, the airline has decided to dump the procedure.
Garuda sales and marketing director Erik Meijer said the airline decided to stop the practice because it had caused the company losses of Rp 2 billion (S$4.1 million) per month from uncollected payments.
According to Erik, the airline had been unable to collect the airport tax from passengers who had bought tickets for domestic routes from overseas.
He blamed the IT system between the airline and the airport operators for the failure.
"For instance, when a customer buys a Tokyo-Jakarta-Yogyakarta ticket in Japan, the system does not directly include the airport tax for the Jakarta-Yogyakarta leg," Erik told The Jakarta Post on Tuesday evening.
"Despite this system failure, we still had to transfer the airport tax, which we were unable to collect, to airport operators, which is why we kept suffering losses from the system," he continued.
Garuda's IT system had adopted the International Air Transport Association's (IATA) billing settlement plan (BSP) to include the airport tax in ticket prices. The airport operators, however, applied a different system that did not match with that of IATA.
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