<p>Washington.- The Dominican Republic’s Minister of Tourism, David Collado, and U.S. Under Secretary of State, José W. Fernández, have finalized a historic open skies agreement aimed at enhancing air travel between the two countries. The official signing ceremony, led by President Luis...
dominicantoday.com
Now, Arajet can start service to America starting end of the year
The competition should, but may not impact fares, absent some mini price matches and loss leader pricing. All the airlines have fixed costs. How they manage their fixed costs along with the costs of which they have no control, impact an airlines ability to stay in business.
Arajet, an ultra low cost carrier, has been able to keep fares reasonable because of how they operate. By way of examples, they currently charge for a carryon bag with a sliding fee based on when you book. Most airlines allow a carryon for free. Next, they do not use jetway bridges whenever possible, avoiding an airport fee there.
Finally, and most importantly, they must pay for landing slots at the airports they intend to fly into……..if such slots are even available……and they are very coveted by the airlines who have them. Some may lease their slots to other carriers, but there are no guaranteed slots to land just because you have an open skies agreement.
I wish them luck, and unlike their predecessor airlines from the DR, they are far better capitalized to withstand the financial costs and headwinds they are now going to encounter as they try to enter the US market against very stiff competition.
Respectfully,
Playacaribe2