will airline fares ... (part 2)

Feb 7, 2007
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As I could not post this before the thread was closed (and yes this is DR related)
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PJT, your post is quite incorrect

Competition is there if only government allows. There are people who are not aware that government(s) set the parameters of routes to be flown and who flies them.
While this is true for some routes, this is not true for more than 50% routes flown from the USA, where Open Skies agreements are in place (OS provides unlimited service/frequencies between any points of the signatory countries, such as USA-EU, etc.)
For DR-USA routes, there are no limits on frequencies or number of operating airlines
http://www.state.gov/documents/organization/155527.pdf
see Articles 2, 11, 12,
As per Annex, DR also grants 5th freedom rights to USA airlines to flights beyond DR to Caribbean and South America and DR has certain 5th freedom rights from the USA to Canada

Given the fact that this Air Services Agreements is from 1986, it is VERY LIBERAL for that time period.

There are other matters of hours of arrival and departure of aircraft as gates and gate times at airports are up to bid, the highest bidder gets the best gates and time slots. You will observe that some of the discount airlines are the ones who have the very early morning flights and late arrivals at airports, they pay less for those times and pass on the savings(?) to you.

This is also only partially correct. This is correct for Slot Coordinated airports, such as London Heathrow, Frankfurt and Paris CDG, in the USA airports such as JFK, EWR, LGA and DCA. This is absolutely incorrect for any airport in the DR. There are plenty of gates and a gate is calculated to accommodate 12 flights per day as a minimum. There is also plenty of slot pairs (landing-takeoff) in all DR airports. Actual usage is FAAR away from the technical limitation. There is no bidding for gates going on in the DR. PUJ just expanded with a whole new pier and can virtually double its capacity. PUJ has also two parallel runways that can be used with 1/2 minute apart takeoff/landings sequence, giving 480 slot pairs per 8-hour period.

Most airlines are at full capacity of aircraft and flight crews, aircraft are full with few or no empty seats, they have no incentive to offer lower fares when everyone is scrambling for seats.

Also only partially correct. Yes, flights are full, but by not adding service they are suffering opportunity cost of additional revenue. But if Flight 1 is 95% full, and they add Flight 2, and there is no increase in demand, it would make both flights full at 47.5% on average. Given the fact that breakeven load factor may be at about 70%, this would make one profitable flight turn into two unprofitable ones. When there is sufficient demand to have two profitable flights, they will do it. Just look at how Copa Airlines expanded. Back in 2005 they had 2 daily flights to SDQ, that's it. In years later, then they added a flight to STI, then in around 2010 they started with 3-weekly flights to PUJ. Flash forward to 2014, they operate 5 daily flights from SDQ (35 frequencies per week) and 32 weekly flights from PUJ (4 daily + 1 frequency 4 days per week). Also they operate 4x per week from Bogota to Punta Cana. When there is demand, the flights will come. But also an airline cannot just start a new frequency. It takes months ... airplanes are finite resources.