New Airline Could Create Low-Fare Vacation Competition for U.S. Carriers

A new airline in the Dominican Republic could create low-fare competition for major U.S. airlines with its lower prices to some destinations. Arajet, which brands itself as a "new low-fare Dominican national carrier," recently announced that it will take its first flight from Santo Domingo to Mexico City on September 15. In a press release earlier this month, the new airline also announced that it will soon offer "amazing fares starting from $55 one way and $149 round trip, taxes included, to wonderful destinations in North, Central, South America and the Caribbean." The new airline comes as prices of air travel have increased over the past several months. In July, newcomer Avelo Airlines announced several flights to some major airports in Florida with prices as low as $39 for one-way tickets. According to the Arajet press release on August 9, the airline is planning to announce several other low-cost flights following its inaugural flight on September 15. The airline plans to have destinations in numerous Mexican cities, such as Monterrey, as well as cities in Colombia, Ecuador, Guatemala, Aruba, St. Martin and El Salvador.

"In October, Arajet will add flights to Toronto and Montreal in Canada; Medellin and Bogota in Colombia; San Jose in Costa Rica; and Kingston in Jamaica; with which it will establish a robust route network of 20 destinations in 12 countries in its first 3 months of operations. The airline also expects to add additional flights to the United States in the near future," the press release said. The airline's CEO, Victor Pacheco, said in the press release that the airline's launch is the "first step in the process to build the first strategic connecting hub in the Caribbean that will foster the Americas connectivity at the lowest fares." "We promised low fares and we are announcing our trade mark low fares never seen before in our country," Pacheco added. The airline's website shows that flights in October and September from Santo Domingo to Mexico City will cost around $135 to $166 for a round trip. In comparison, flights on Delta Air Lines' website for a similar trip showed prices over $2,000. In a press release in March, Boeing announced that Arajet had purchased 20 737 MAX airplanes, "specifically the high-capacity 737-8-200 model, to deliver low operating costs and expand affordable travel options in the Americas." Pacheco said that the purchase gives the airline "the solid foundation necessary to provide flights at affordable prices to travelers in the region." Newsweek reached out to Arajet for further comment.

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Earlier this month, the Bureau of Labor Statistics released new data for the U.S. consumer price index, which is widely used to measure the rate of inflation. In the data set, the Bureau of Labor Statistics said, "The index for airline fares fell sharply in July, decreasing 7.8 percent." But it noted that over the past 12 months, the index for airline fares increased by 27.7 percent, indicating an increase in the price for airline fares and travel.