Economy November 26, 2023 | 6:29 pm

Buy car in DR

AERODOM clarifies inaccurate information circulating in the media

Santo Domingo.- In view of inaccurate information circulating in different media and social networks regarding the fare adjustment of US$2.48 (two dollars and forty-eight cents) for inflation, recently announced by AERODOM, the airport company issued the following press release:

The fare adjustment authorized by the Airport Commission to AERODOM has been made based on Article 5.4.4 of the concession contract signed in 1999 between AERODOM and the Dominican State, and applies exclusively to regulated airport fares, which have a minimal impact on the total cost of airfare.

AERODOM further informs that it is not true that international passengers using the services of air carriers on scheduled or charter flights will have to pay from next December a new increase of US$21.5 more for their tickets.

The inflation adjustment was made to allow regulated airport fares to partially recover their real value after having been frozen for more than five years, mainly due to the Covid-19 pandemic.

The U.S. Consumer Price Index (CPI) accumulated from 2017 to 2023, which serves as a reference for inflation rate adjustments, is approximately 26%. The Dominican State only authorized AERODOM a total adjustment of 18.4%, to be made staggered over three years: 13% in 2023, 2.7% in 2024 and 2.7% in 2025; all based on the existing contract.

The total increase to be applied in 2023 is RD$147.43 Dominican pesos (US$2.48), this being a marginal amount in the total cost of airfare. Likewise, in 2024 the adjustment will translate into RD$32.53 (US$57 cents); and in 2025 it will translate into RD$33.65 (US$59 cents). These amounts represent less than 1% of the overall airfare.

Multiple international studies have concluded that airport fee adjustments are not directly related to airfare increases, such as the study “Airfare Trends in Latin America and the Caribbean” conducted by the specialized company Flare Aviation Consulting; as well as the analysis “Determining Factors of Airfares” prepared by ICF for the Airports Council International Latin America and the Caribbean (ACI-LAC).

It is widely demonstrated that airport charges represent a very low percentage of airline operating costs (7% or less in the Latin American and Caribbean region). Hence, airline tickets are priced according to market, not operating cost.

Despite the reduction in the value of real revenues due to inflation, AERODOM has continued to make significant investments in all of its airports, and additional investments of over US$60 million are planned for the next two years.

Aware that the deadline for the implementation of this adjustment has been very short, AERODOM established a transitional billing procedure to support all airlines, which allows deferring payment for a reasonable period of time.

Even after applying the adjustments, our country’s airport tariffs are below the regional average, as we were able to confirm in a recent competitiveness study conducted by the Latin American and Caribbean Air Transport Association (ALTA).

Inflation adjustments are a common practice for companies in all industries, in order to maintain their income levels and compensate for devaluation over time as a result of inflation.

AERODOM, under the leadership of VINCI Airports, has boosted the growth of air transport thanks to its global network and incentive policy. From having an average traffic growth rate of 0% until 2015, it went to a traffic growth rate of 6% per year, registering a growth of 20% over 2019 in 2023.

Thanks to this work, today there are more and better options to travel to and from the Dominican Republic, with more than 30 new routes that encourage competition and promote competitive prices. For example, from having only two solutions to travel to Latin America, there are now more than 10 direct routes.

3 2 votes
Article Rating
Notify of

Inline Feedbacks
View all comments