What Is an Overflight Fee? The Airspace Also Has Economic Value
An aircraft flying from Australia to Asia may never land in Indonesia. No passengers disembark, and no terminal facilities are used. Yet while the aircraft crosses airspace managed by Indonesia, air traffic controllers continue to monitor its position, maintain separation from other aircraft, provide flight information, and stand ready to support safety. These largely invisible services are what an overflight fee pays for.
For Indonesia, located between the Indian and Pacific oceans and along major Australia-Asia flight corridors, airspace represents both sovereignty and economic infrastructure. The key question is whether Indonesia is receiving reasonable value for the services provided to aircraft that merely pass overhead.
Overflight Fee Definition
An overflight fee is an air navigation service charge imposed on an aircraft that crosses airspace served by a country without landing or departing there. In Indonesia, the charge is collected by Perum LPPNPI, or AirNav Indonesia, the country’s sole air navigation service provider. It supports air traffic services, aeronautical telecommunications, aeronautical and meteorological information, and search-and-rescue information [1].
An overflight fee should therefore not be understood as the price of purchasing access to Indonesia’s sky. It is better viewed as a user charge for the radar, communications, traffic management, personnel, and safety systems used throughout the flight.
The opportunity became more visible following the realignment of the Jakarta and Singapore Flight Information Regions. AirNav reported that cross-border overflights increased by 81.8% in 2024 from 2023. The increase demonstrates how Indonesia’s geographic position can produce a growing base of traffic and air navigation services [2].
How Is the Charge Calculated?
The overflight fee is calculated by multiplying the unit rate by the route unit. The route unit is the product of the distance factor and weight factor. The distance factor represents the distance flown in the airspace served, generally in units of 100 kilometres, while the weight factor is determined by the aircraft's Maximum Take-Off Weight, or MTOW, category [3].
In the example above, a distance of 1,000 kilometres produces a distance factor of 10. Multiplying it by a weight factor of 50 produces 500 route units. At a unit rate of US$0.65, the illustrative fee is US$325. Heavier aircraft or aircraft flying a longer distance therefore pay more. The simulation is not an actual invoice for a particular aircraft type.
The chart shows that charges move in direct proportion to distance and the weight factor. At 1,000 kilometres, weight factors of 25, 50, and 75 produce US$162.5, US$325, and US$487.5. Increasing the distance from 500 to 1,500 kilometres triples each charge. Because all lines assume a unit rate of US$0.65, a rate adjustment would change every result by the same percentage, provided the route and aircraft weight remain unchanged.
How Much Revenue Does Indonesia Earn from Overflight Fees?
AirNav Indonesia’s audited 2025 financial statements reported IDR 4.149 trillion in operating revenue. Of this amount, IDR 3.785 trillion came from air navigation services and IDR 363.7 billion from terminal navigation services. Air navigation service revenue increased by approximately 11.0% from IDR 3.411 trillion in 2024 [4].
The performance was supported by the recovery and growth of air traffic. The Jakarta-Singapore FIR realignment and strong international and overflight traffic caused AirNav’s revenue to grow faster than costs in 2025. This demonstrates how additional flights crossing Indonesian-managed airspace can expand the air navigation revenue base and strengthen AirNav’s capacity to fund aviation services and investment [5].
A second distinction is equally important. Overflight fees are revenue of AirNav as the state-owned service provider, not revenue that automatically enters the state budget in full. The funds first support operations, personnel, system maintenance, and navigation investment. The state benefits through a stronger public asset, applicable taxes or distributions, and a lower need for future capital support.
Is Indonesia Really Cheaper?
Indonesia’s US$0.65 per route unit appears extremely low beside the United States, which charges US$61.75 per 100 nautical miles in en-route airspace and US$26.51 in oceanic airspace. The figures are not directly comparable, however. The US formula is primarily distance-based, while Indonesia multiplies distance by an aircraft weight factor. A meaningful comparison requires the same aircraft, distance, airspace category, and exemptions [6].
Thailand illustrates another approach. AEROTHAI applies different unit rates to member and non-member airlines and charges overflights at 1.45 times the regular en-route charge. Each country therefore designs its tariff around its own cost structure, aviation policy, and airspace characteristics [7].
Should Indonesia Increase the Overflight Fee?
Indonesia has a reasonable case for reviewing the rate. The US$0.65 overflight rate has applied since KM 63 of 2019, while investment requirements continue to rise. Fitch expects AirNav’s capital expenditure to increase from Rp352 billion in 2025 to Rp750–800 billion in 2026 and around Rp1.2 trillion in 2027 as ageing navigation assets are replaced.
Policy should not, however, aim simply to raise the fee as high as possible. Airlines select routes using a combination of navigation charges, fuel consumption, flight time, weather, and geopolitical risk. If the increase is excessive, some operators may choose alternative airspace. Revenue per flight may rise while traffic volume and total revenue weaken.
A stronger option is a gradual adjustment based on audited service costs, traffic forecasts, investment needs, service quality, inflation, and consultation with airlines. ICAO’s charging policies likewise emphasize cost-relatedness, transparency, non-discrimination, and consultation with users [8].
Any additional revenue should also have a visible purpose, such as radar modernization, satellite-based navigation, cyber resilience, personnel training, and safety improvements. The increase would then represent a transparent exchange between the charge paid and the quality of service received.
References
Ministry of Transportation of the Republic of Indonesia, Ministerial Regulation No. PM 34 of 2024 on the Formula and Mechanism for Determining Air Navigation Service Charges. URL: https://peraturan.bpk.go.id/Details/313628/permenhub-no-34-tahun-2024
Ministry of Transportation of the Republic of Indonesia, Ministerial Decree No. KM 63 of 2019 on Air Navigation Service Charges. URL: https://hubud.kemenhub.go.id/regulasi/cari/3056
AirNav Indonesia, Significant Increase in Cross-Border Overflights Following the Natuna FIR Realignment, 10 January 2025. URL: https://www.airnavindonesia.co.id/berita-dan-siaran-pers/pasca-pengalihan-fir-natuna-dari-singapura-airnav-indonesia-catatkan-peningkatan-signifikan-penerbangan-lintas-negara/
AirNav Indonesia, Audited Financial Statements for 2025, 20 April 2026. URL: https://www.airnavindonesia.co.id/wp-content/uploads/2026/04/LK-2025-Audited.pdf
Fitch Ratings Indonesia, Fitch Affirms AirNav Indonesia at AAA(idn); Outlook Stable, 22 April 2026. URL: https://www.airnavindonesia.co.id/wp-content/uploads/2025/04/Fitch-Ratings-AirNav-Indonesia-2026.pdf
Federal Aviation Administration, 14 CFR Section 187.53, Calculation of Overflight Fees. URL: https://www.ecfr.gov/current/title-14/chapter-I/subchapter-K/part-187/section-187.53
Aeronautical Radio of Thailand, Air Navigation Services Charges. URL: https://eservice.aerothai.co.th/en/ans-charges
International Civil Aviation Organization, ICAO Policies on User Charges and Taxation. URL: https://www.icao.int/sustainability/icaos-policies-user-charges-taxation
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Excellent, educational article explaining overflight fees. You do a fantastic job unpacking this often‑misunderstood aviation‑economic topic, including calculation mechanics, revenue flows, and the delicate policy dilemma of rate reviews. The cross‑country comparisons and official cited references add great credibility. This is very valuable reading for anyone interested in aviation policy and Indonesia’s strategic air‑space position. Great work! --recordly