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Oman Air - Aviation Industry Lift-Off

Tuesday, 12 January 2010 10:17

seats_oman_air_takes_to_the_road_in_oman

Following a tough economic year for the region, welcome news came from the aviation industry, which witnessed flag-carrier Oman Air closing 2009 with successful growth figures. The airline reported a 17% increase in passenger numbers and a 67% increase in revenue for its cargo division, demonstrating its growth strategy has retained resilience despite a poor year globally for the sector.

The good news was further augmented by an announcement at a general meeting held by the company that the government had increased its operating capital six-fold, from RO50m ($129.8m) to 300m ($779.1m).

In all, passenger numbers for the airline rose from 1.98m to 2.33m last year, as the company introduced an additional 8 aircraft to bring its fleet to 21. Among the new entrants were Oman Air's first A330s, enabling the Sultanate to expand its range, with the addition of several new routes to destinations such as Frankfurt, Munich and Paris. The airline now serves a total of 32 destinations worldwide, with other recent additions including the Maldives and Sri Lanka, both added in October 2009.

A recent order for five Embraer 175s, due for delivery in 2011, indicate that the airline is looking to expand its coverage of the local market, and indeed perhaps to enhance the appeal of Oman as a hub for multi-trip tourism. With the Maldives and Sri Lanka relatively close by, expanding and consolidating these routes offers Oman Air a useful new niche in the market.

The company also has six of the new Boeing 787 "Dreamliners" on order, which it will lease from Kuwaiti company Alafco, as well as two further A330s due in 2010. The first three A330s delivered in 2009 have already been retrofitted with the latest mobile phone and broadband connectivity hardware, enabling passengers to stay connected while in the air, while the latest A330s will come with the technology pre-fitted.

The combination of long- and short-haul equipment, alongside the airline's new Business Class Seat configuration launched early last year, seems part of a strategy to position itself as "a boutique airline in the premium segment". While the global market for premium air travel has shrunk dramatically in the past two years, following a so-called "boutique" strategy may well prove a more resilient model for first- and business-class travel.

Given the highly competitive nature of Gulf premium aviation, with Emirates, Etihad and Qatar Airways all undergoing aggressive expansion campaigns, and with big order books to expand still further, Oman Air will be looking to achieve a competitive edge through a combination of service and destination choice. As CEO Peter Hill told press in November, "We are definitely not talking Emirates or Etihad here." Rather, the airline remains one of the few carriers to still pay a full 9% commission to travel agents, and with Muscat already a popular travel destination among more affluent travellers in the adventure or cultural tourism bracket, using the airline's increasing range of short-hop destinations from Muscat to augment package deals is a prime market for growth.

With Europe moving steadily out of recession, and official figures showing all major economies on the continent except the UK to have already resumed economic growth, 2010 will witness renewed consumer confidence that is sure to trickle into the tourist market. The next two months however will be vital for judging the extent of recovery, as the New Year remains a period when demand for summer packages kicks off. If tourist appetites have recovered sufficiently, Oman Air is likely to see its impressive growth carried forward to 2010.

Global Arab Network

This article is published in partnership with Oxford Business Group

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Published comments are the opinions of private individuals and do not reflect the views of Global Arab Network