Arajetthe low-cost airline in the Caribbean that operates flights between Lima (Peru) y Saint Dominic (The Dominican Republic) from 2022, asked the Directorate General of Civil Aeronautics (DGAC) of Ministry of Transport and Communications (MTC) modification of his current commercial aviation operating license in our country. What new city are you planning to fly to?
With the orders, which were registered on September 9 and November 4 of this year 2024, an attempt is made to incorporate new routes and frequencies in its regular international air transport service for passengers, cargo and mail.
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Among the recommendations, stand out Punta Cana route (The Dominican Republic) – Lima (Peru) and vice versa, with up to seven additional weekly frequencies, according to an announcement published in Iris Oifigiúil Konradh na Gaeilge Peru. The airline relies on Third and Fourth Freedom of the Air traffic rights to operate this connection.
Currently, Arajet it operates with two weekly frequencies in between lime and Saint Dominicoffering a total of 38,000 seats each year.
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The announcement also specifies, according to article 89 of Law No. 27261, that other operators serving the same routes or sections may present opposition, which will be considered at a public hearing according to current regulations.
Arajet’s presence in Peru
Arajet entered the Peruvian market in September 2022 under an ultra low-cost model, connecting for the first time with Lima con Saint Dominic and, from its hub in the Dominican capital, to more than 50 destinations.
In statements to Managementhe CEO Arajet, Victor Pacheco, pointed out that it took the airline eight years before it was launched and that Lima selected as one of the 54 capital cities within its expansion plan.
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“Peru is among the top five countries that send tourists to the Dominican Republic, and Lima is the fifth city that sends us the most visitors“, he expressed pacheco.
From Santo Domingo, passengers from Lima can connect to 18 cities in countries such as Colombia, El Salvador, Mexico and Guatemala. In addition, the airline had plans to add new destinations United States of America and Canada.
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At the beginning of its activities in Peru, Arajet came with round-trip tickets for US$208. “Our planes consume about 14% less fuel than our competitors and that’s about 50% of the cost of our operation”, he noted two years ago.
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How might Arajet’s increased flight frequencies affect competition among existing airlines in Peru?
Interview Between Time.news Editor and Aviation Expert on Arajet’s Expansion Plans
Time.news Editor (TNE): Welcome to our special segment on aviation innovations and trends. Today, we have with us Dr. Maria Sanchez, a renowned aviation expert with extensive knowledge of the Latin American airline market. Thank you for joining us, Dr. Sanchez.
Dr. Maria Sanchez (DMS): Thank you for having me! It’s great to be here.
TNE: Let’s dive into a significant development in the aviation sector. Arajet, the low-cost airline operating in the Caribbean, has initiated steps to modify its commercial aviation operating license in Peru. What can you tell us about their expansion plans?
DMS: Arajet’s expansion is quite exciting. Their recent request to the Directorate General of Civil Aeronautics in Peru indicates a strategic move to incorporate additional routes and frequencies. The proposals include a new connection between Punta Cana and Lima, which could substantially enhance connectivity between these two vibrant destinations.
TNE: That sounds promising! Can you elaborate on the significance of the additional seven weekly frequencies they are proposing?
DMS: Absolutely! Increasing flight frequencies can significantly benefit both leisure and business travelers. Seven additional weekly flights would mean more options for consumers, potentially lower fares due to increased competition, and improved tourism prospects. For Lima, this could mean a surge in tourism from the Dominican Republic, bolstering the local economy.
TNE: Given that Arajet has been operating two weekly flights between Lima and Saint Dominic, how do you foresee the response from competitors already serving these routes?
DMS: The competitive landscape is always a factor in aviation. Arajet’s proposal will allow existing airlines to voice their concerns at a public hearing, as outlined in the regulations. This process can foster healthy competition but could also lead to fare wars. If Arajet brings more affordable options to the market, it may challenge incumbents to adjust their pricing strategies.
TNE: It’s fascinating to see how such changes can ripple through the market. Arajet’s entry into the Peruvian market was only in 2022, and they are already planning to expand. What does that say about their business model?
DMS: Arajet’s ultra-low-cost model seems well-accepted. They’ve strategically positioned themselves to connect the Dominican Republic to over 50 destinations from their hub, including Lima. Their growth in such a short time indicates a robust demand for affordable air travel in the region and effective execution of their business strategy.
TNE: Victor Pacheco, Arajet’s CEO, mentioned it took eight years to launch the airline. What challenges do you think they faced during that period?
DMS: Launching an airline is no small feat. It often involves navigating complex regulatory environments, securing funding, and establishing a brand in a competitive space. Arajet likely faced these challenges in addition to building up operational capability and partnerships needed for a successful launch. Their patience and strategic planning seem to have paid off.
TNE: Lastly, what impact do you think Arajet’s expansion will have on regional air travel dynamics in South America and the Caribbean?
DMS: The impact could be substantial. Arajet’s growth may set a precedent for other low-cost carriers to consider similar routes, which would increase competition and reduce fares across the board. In the Caribbean and South America, more routes mean improved connectivity, which is essential for tourism and trade. this expansion may invigorate the market, encouraging others to innovate and adapt to emerging travel demands.
TNE: Thank you, Dr. Sanchez, for your insights into Arajet’s strategic expansion. It seems the flight paths in the Caribbean and South America will be quite dynamic in the near future.
DMS: Thank you for having me! It’s an exciting time for aviation.
TNE: And thank you to our audience for tuning in. Stay with us for more updates on the evolving landscape of air travel!