Muscat: Oman Air, the national airline, announced a fixed fare for citizens on flights between Muscat and Salalah even as its ongoing transformation plan resulted in a 36-per cent reduction in net losses by the end of 2023 and a 30-per cent increase in revenue compared to that in 2022.
The company also did not obtain any additional bank loans or government guarantees during the year, which is unprecedented in the company’s history.
To promote domestic tourism, the airline will offer fixed national fares between Muscat and Salalah. A return economy class ticket will be priced at RO 64 throughout the year, while a one-way ticket will be RO 35.
However, during the khareef season, the return economy class ticket will be priced at RO 54.
Speaking to the media during the third press conference to update on the airline's restructuring programme, Eng Said bin Hamoud al Maawali, Minister of Transport, Communications and Information Technology, and Chairman of the Board of Directors of Oman Air, said that in terms of operations, the airline’s load factors improved by 9 per cent in 2023, with more than six million passengers transported across its various destinations, and more than 45,000 scheduled flights operated.
Oman Air Cargo also achieved positive growth, with a 58-per cent increase in capacity compared to that in 2022.
Speaking to the Observer, he said: "As already announced, we will cancel flights to Islamabad, Lahore, Chittagong and Colombo from April. Currently, we are rightsizing and repositioning the company. So by 2027, it will be a healthy company and it is ready for growth. So questions about growth should be asked by 2027."
"We have started coordinating with SalamAir from last year, and signed an MoU to increase the number of passengers through Muscat International Airport, and hopefully that will serve both the companies in future. We need to end up with a relationship where there is a proper codeshare between us."
CUTTING LOSSES
The airline’s 2023 results were the outcome of the implementation of the transformation programme’s second phase, which was initiated in March 2023, which included strategic changes to flight destinations for the 2023 winter season, the closure of unnecessary facilities like the arrivals lounge at Muscat International Airport, and the reduction and cancellation of several non-essential service contracts.
The company has also curbed unnecessary expenses such as sponsorships, the most prominent being its agreement with Chelsea Football Club, which was terminated amicably and without financial consequences.
The airline also renegotiated many code-share agreements and terminated several sales agreements with companies that did not provide a direct benefit.
Agreements have also been terminated with many sales agents, with expenses being optimised on the passenger experience to ensure the airline reflects the spirit of Omani hospitality while controlling costs.
Additionally, a large number of catering expenses were reduced during September 2023, contributing to achieving monthly savings. Furthermore, an extensive study was conducted regarding the process of joining the Oneworld Alliance.
PLANS FOR 2024
Oman Air will implement a series of changes to continue improving its financial and operational performance, starting with the restructuring of its route network and flight schedule as of April.
During the transformation phase, the airline has preserved most of the current route network, with only four destinations cancelled till date. However, the number of flights will be reduced, and the timing of flights will be optimised to suit the local market and inbound tourists.
Overall, the restructuring process will reduce the number of seats offered by Oman Air by about a third of its current levels. The Transformation Office is evaluating scenarios to reduce its wide-body fleet (currently made up of Airbus and Boeing) to single-family aircraft to determine the most financially suitable option while continuing to meet demand.
During the coming months, Oman Air will seek to conclude new partnership agreements with international airlines.
These partnerships will be based on quantitative analysis with the establishment of specific pricing mechanisms and controls to ensure the airline benefits fairly from them. A comprehensive review will be conducted to determine the ongoing cost rationalisation aspects of the company.
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