What's next for PAWA Dominicana?

MIAMI — After a three-year hiatus, Dominican Republic-based carrier PAWA Dominicana has started operations last Friday, with two flights to Curaçao and Aruba, departing from Las Americas International Airport in Santo Domingo. A third flight to Saint Maarten was launched last Sunday as well.In an interview to Alexander Barrios, Corporate Affairs Director of the airline, explained that PAWA "will benefit from the potential of Santo Domingo Airport as a regional hub, and use the country as transfer point to our destinations." The airline has also plans to expand to the U.S., Puerto Rico and Cuba before the end of the year.Originally founded in 2007, PAWA ceased operations in 2012 after several operational and financial constraints. One year later, a group of investors led by Venezuelan entrepreneur Simeon García, also owner of Aserca and SBA Airlines, purchased the airline. The process of re-certification, crew and staff training, and the incorporation of five MD-80 and DC-9 aircraft has taken almost two years.

A Growing yet Poorly Competitive Environment

Despite the growth of the tourism industry in Dominican Republic, the country has failed to have a flag carrier since the demise of Dominicana de Aviación two decades ago. Since then, APA Internacional, Aeromar and Air Santo Domingo have tried to fill the gap left by Dominicana, but none succeeded at the long term.Currently, American Airlines and now JetBlue dominate the U.S. - Dominican Republic market, while Curaçao and Aruba routes are served by Insel Air, which offers a similar product to PAWA, but with a larger and well established network that serves the Caribbean, Venezuela, Brazil and the U.S.Besides the threat of having larger competitors with better in-flight products and networks, PAWA also faces a major challenge and is the lack of a supportive local regulation that might favor its growth. During the interview, Barrios admitted "we need more support from the government to transform Santo Domingo in a hub. Due to bad past experiences, some officers and authorities believe that a Dominican flag carrier is not feasible."Dominican Republic has one of the highest taxes and charges for aviation in the region. Just to mention an example, PAWA $259,00 round-trip fare from Santo Domingo to Curaçao skyrockets to $475 due to charges and taxes that sum $216.Many countries in the region, including Dominican Republic, consider aviation industry an easy target for taxation. During the last Annual General Meeting in Miami, Peter Cerda, IATA’s regional vice president for the Americas assured that "Governments need to understand that the real value of aviation is in the global connectivity it provides, not the fees and tax receipts that can be extracted from it.”PAWA Dominicana has the potential to regain spaces in the Dominican market and become a relevant player in Caribbean Aviation. However, there is a huge task ahead to reinforce its network, persuade legislators and authorities that its business model will work, and the most important, to convince customers that will not repeat the mistakes from the past.