Air and Cargo Costs Analyzed to Promote Competitiveness in the Transport Sector

In an effort to reasonably confront the high cost of passenger and cargo transport, three state institutions have decided to unite their efforts “to promote, manage and co-finance, in a joint effort, the diagnostics, analysis and reforms necessary for development and competitiveness of transporting passengers, cargo and mail to the extent that these variables, affecting internal and external development, can be controlled.

“our country deserves to develop its competitive advantages on a basis of logic, agility, quick turn-around and tourism and to develop strategies that strengthen the aeronautic industry from the point of view of costs…”

This initiative of the National Competitiveness Council (CNC), a mixed private and public sector organization, has called on the Dominican Institute of Civil Aviation and the Department of Ports and Airports to put together their accumulated “work experience in coordination with the private sector and in the design of national plans” in an effort to “take advantage of the benefits of the reforms and research they wish to carry out in the Department of Ports and Airports and the Institute of Civil Aviation,” states the agreement.

The agreement was drawn up by Andrés van der Horst Álvarez, Executive Director of the CNC, as well as by José Tomás Pérez, Director General of the Dominican Institute of Civil Aviation (IDAC) and Andrés van der Horst Requena, Director General of the Department of Ports and Airports (DA), according to a press release from the from the Council.

Van der Horst Álvarez said “our country deserves to develop its competitive advantages on a basis of logic, agility, quick turn-around and tourism and to develop strategies that strengthen the aeronautic industry from the point of view of costs, efficiency and the airports. It is a fundamental part of the development and competitiveness strategy. This study seeks to analyze our relative position in the region, our main competitors and to see how to propose public policies to improve the environment for industry to become stronger and to receive more investment so that we can develop more tourism and exports.”

The three entities decided to co-finance the necessary studies that will allow them to more clearly understand the cost variables that go into the air transport sector, with an eye to improve competitiveness in the sector and to make the Dominican Republic the best logistic center and tourism destination in the Caribbean.

In addition, they agreed to hire national and international consultants who will independently analyze the impact of rising oil costs as well as other factors that influence airline prices. The reforms, resulting from the activities, programs, research and analyses will not be divulged by the professional consultants who have signed confidentiality clauses due to the strategic importance of this type of information.

Each of the state entities will designate a representative who will provide follow-up for the mandates agreed upon in the signed accord, including implementation of other actions that may surface from the research.

The state organizations consider that “the worldwide rise in oil prices is negatively affecting air travel in the Dominican Republic as they are forcing up the airline operating costs who then have to raise the prices for the services they offer; it is causing them to have to eliminate routes or cut back on frequency,” ultimately hurting the agro-industrial sector which needs to export its products.

They also decided to join forces in terms of passengers and cargo which will provide a fundamental support to our economy and will help the agricultural, export and tourism sectors, especially the latter.

It is for this reason that “in the face of this situation a diagnostic analysis must be carried out that will help us put into effect reform policies and regulations necessary to confront this world situation, to improve the competitiveness of the sector and to generate the necessary flow to make the Dominican Republic the best logistics center and the best tourist destination in the Caribbean,” according to the agreement.