Arajet absorbs jet fuel cost surge to protect fares as 2027 expansion advances

Dominican airline Arajet is absorbing much of the increase in jet fuel costs, which have risen from approximately $2.40/gal to nearly $5/gal, as the carrier seeks to preserve competitive fares and expand its Latin American network, a company executive said at the ALTA Airline Leaders Forum in the Dominican Republic.

Manuel Luna, Arajet's director general of communications and external affairs, said at a press conference at the forum that the sharp increase in fuel expenses has forced the airline to adjust its pricing strategy, with fare increases concentrated in markets and travel periods where demand can support them.

"It is impossible to pass the entire increase in fuel costs on to passengers, so we have absorbed most of the impact," Luna said, according to a translation of his Spanish-language remarks.

The carrier has maintained lower fares in other markets, including in some cases operating at a loss to protect market share, while continuing to stimulate demand through promotional pricing.

Luna said the airline's Boeing 737 MAX 8 fleet has helped cushion the financial impact through improved fuel efficiency, although higher fuel costs have nevertheless affected the company's financial plans and projections.

The fuel-cost pressures come as Arajet pursues continued expansion across the Americas.

The airline expects to transport approximately 2.2 million passengers in 2026 and more than 3 million in 2027, while expanding its network from 30 destinations across 17 countries to 35 destinations in more than 20 countries.

Mexico remains a significant growth market, with Arajet planning to increase weekly frequencies to Mexico City's Felipe Ángeles International Airport from 12 to 14 during the first quarter of 2027. Further increases could follow in the second half of the year, depending on demand and aircraft deliveries.

Arajet is also seeking regulatory approvals to begin flights to Venezuela, potentially launching service to Caracas in March or April 2027.

The carrier's expansion strategy reflects its efforts to stimulate passenger traffic through additional capacity and lower fares, even as fuel costs complicate efforts to maintain profitability.

SAF, a longer-term priority

Luna told Platts that Arajet considers sustainability a strategic priority but views the adoption of sustainable aviation fuel as a longer-term prospect.

The airline is developing environmental performance indicators for a sustainability report planned for 2027, with fuel efficiency currently forming part of its approach to reducing its environmental impact.

Luna did not announce a specific timeline for SAF adoption, procurement agreements or blending commitments, but identified Lucy Pérez as the executive overseeing Arajet's sustainability efforts and acknowledged that the carrier is still developing its broader environmental strategy.

For Arajet, the immediate challenge remains managing conventional jet fuel expenses while maintaining the competitive fares and network expansion that have supported its growth.