Does Oman need a third airline?

Muscat: The UAE Civil Aviation Authority (CAA) has announced that it will issue a license to a new low-cost airline, a decision that has caused a stir in the country as the Sultanate already has a budget airline, which was established in 2017, while the national carrier, Oman Air, has been undergoing a restructuring plan that is expected to last until 2027.

Although the Civil Aviation Administration has not yet announced the specific business scope of the new airline, experts say that the Middle East, including Oman, has become an engine of tourism growth in the post-epidemic period.

The Ministry of Heritage and Tourism also admitted that Oman is not promoted enough in Spain and other countries, and that connectivity is also a problem.

It is worth noting that there are still no direct flights to several potential markets in China and Europe.

On a positive note, Middle Eastern airlines continue to see demand growth, with demand up 10.8% year-on-year. Capacity increased 13.9% year-on-year compared to March 2023.

After the epidemic, aircraft movements increased by 35% between 2022 and 2023, and passenger traffic at Muscat Airport increased by 47%.

According to the United Nations tourism department, in 2023, the Middle East led the recovery and became the only region to exceed pre-pandemic levels, with the number of inbound tourists 122% higher than in 2019, reaching 87.1 million international tourists.

Global tourism is projected to grow strongly by 2030, requiring significant investments to provide accommodation, transport and other tourism-related services and infrastructure to meet expected demand while improving economic, social and environmental outcomes.

Nayef Aburi, Chairman of the Civil Aviation Authority, said that the Civil Aviation Authority is optimistic about the growth space of the aviation industry in the Sultanate, and the Sultanate will build six new airports, most of which are expected to be operational by 2028-2029.

He said in an interview that with the design work of these new projects underway, the number of airports in the country will increase to 13, which will promote the development of domestic aviation and tourism.

The number of passengers using the Sultanate’s airports is expected to increase from the current 17 million to 50 million by 2040.

It is worth noting that Muscat Airport will have a passenger traffic of 13 million to 14 million by 2023, with an annual passenger traffic of 20 million.

With the budget already allocated, the new airport will also help increase international passenger traffic and boost local logistics and tourism by connecting the area to the industrial areas of Sohar, Salalah and Sohar.

Elena Sorlini, CEO of Zayed International Airport, said budget airlines such as Air Arabia and Wizz operating from Abu Dhabi meet much of the underserved demand but have also proven to stimulate demand. Since their launch in 2020, Wizzair Abu Dhabi and Air Arabia have managed to gain 22% of the market share in 2023.

Verify the situation of Oman Air

Oman Air

The airline’s 2023 performance is the result of the implementation of the second phase of the transformation plan, which was launched in March 2023 and included a strategic adjustment of the 2023 winter flight destinations.

The airline also renegotiated many codeshare agreements and terminated several sales agreements with companies that did not bring direct benefits.

In addition, the process of joining the oneworld alliance was extensively researched.

Plans for 2024

Oman Air will implement a series of changes to continue to improve its financial and operational performance, starting with a restructuring of its route network and flight schedule from April.

During the transformation phase, the airline has retained most of its current route network, with only four destinations being cancelled, but the number of flights will be reduced and flight schedules will be optimized to suit local markets and inbound tourists.

Overall, the restructuring process will reduce the number of seats offered by Oman Air by approximately one-third from current levels.

The Transformation Office is evaluating options to reduce its widebody fleet, currently made up of Airbus and Boeing, to a single family of aircraft to determine the most economically appropriate option while continuing to meet demand.

Salam Air

SalamAir commenced commercial operations in 2017 with the aim of meeting the growing demand for affordable travel and creating jobs and entrepreneurship opportunities across various industries in Oman. The company operates to around 45 destinations, including seasonal ones, with an A320neo, four A321neos, one A321 freighter, and expects to add more airlines to its fleet in the future.