Arajet's expansion plans are a major step in the Dominican Republic's hub ambitions
Arajet's plan to open a second base at Punta Cana International Airport is a major step in the evolution of not just the airline, but the Dominican Republic's ambitions to rival Panama as the major hub connecting the Americas.
Embracing competition signals Arajet's confidence
Arajet recently announced plans to launch international services from Punta Cana to São Paulo, Toronto, Montréal, Santiago (Chile), Lima, Mexico City and Cancún in Oct-2024.
The choice of destinations illustrates the confidence with which Arajet is approaching the next phase of its expansion, nearly two years after commencing operations. According to the CAPA - Centre for Aviation Route Capacity Analyser and OAG schedules data for the week commencing 05-Aug-2024, all but the routes to Mexico City and Cancún are served by at least one other carrier, with multiple established airlines operating on the routes to Toronto and Montréal.
In contrast, only one of Arajet's initial 15 routes on launch featured any competing airlines.
Expansion also strengthens Dominican Republic's hub ambitions
Arajet's announcement also included plans to add Buenos Aires, Quito, Guayaquil, Bogotá, Medellín and Cartagena to its Punta Cana network in the future.
Cartagena is the only one of these destinations currently unserved from Punta Cana, but the choice of these destinations is more significant as a signal of Arajet and the Dominican Republic's intention to position the country as a major hub in the Americas.
CEO Victor Pacheco said as much when announcing the expansion, stating: "At Arajet we are committed to making the Dominican Republic the new air hub of the continent".
JetBlue and American account for around one third of Dominican Republic international seats
Arajet is currently the third largest operator in the Dominican Republic's international market, based on CAPA - Centre for Aviation and OAG data for the week commencing 05-Aug-2024.
Dominican Republic international seats for all business models, w/c 05-Aug-2024
JetBlue Airways has the largest share of international capacity, accounting for almost one in four seats (23.5%), ahead of American Airlines (10.0%). Arajet had a 7.1% share of international capacity for this analysis week, ahead of, but a similar volume to Frontier Airlines (7.0%), United Airlines (6.5%) and Delta Air Lines (6.4%).
Dominican Republic is well positioned to grow as a hub
It takes a brave airline to even suggest a challenge to Copa Airlines and Panama City Tocumen International Airport's long standing hegemony as the main hub connecting the various points of the Americas and the Caribbean, but Arajet has reason to be confident.
Arajet's most recent traffic update revealed passenger volumes for the first half of 2024 already equalled its total traffic for the full year 2023, a sure sign of the LCC's continued growth.
This has been partly facilitated by a consistent growth in capacity.
Arajet weekly system seat capacity, as at w/c 05-Aug-2024
Much like Panama's ideal geographical position "in between" North and South America, the Dominican Republic occupies a slice of the Earth well suited to connecting the region.
Its location even possesses an advantage over Panama in connecting to the Caribbean islands, not to mention cities like Miami with a large Dominican diaspora.
Government support crucial in a region where relationships are often poor
The first half of this decade has been a perilous time for LCCs in Latin America, with carriers like Ultra Air and Viva having perished in the wake of the COVID-19 pandemic.
Arajet, however, has quickly grown into one of the region's success stories.
Much like Copa Airlines, the carrier enjoys a strong and supportive relationship with its national government, which is a blessing in a region notable for clashes between airlines and governments.
Indeed, a glance back to the announcement of its launch in Sep-2022 reveals the Dominican Republic's President Luis Abinader stating: "Our government will continue supporting Arajet… to assure its competitiveness and create an air hub that promotes tourism, trade and cultural exchange, and provides an opportunity for all Dominicans abroad to visit their country at affordable prices".
Two years on, that support has paid dividends and the nation's hub ambitions are one step closer to reality.