Is there a need for a third Oman-based airline?

Muscat: The Civil Aviation Authority (CAA)'s intention to licence a new low-cost airline has created a buzz in the country as the Sultanate of Oman already has a budget airline, which started in 2017, while the national airline, Oman Air, has been undergoing a restructuring programme, expected to continue until 2027.

While the CAA is yet to unveil details of the scope of the new airline, according to experts, the Middle East region, including Oman, has been the engine of growth in the travel and tourism sector in the post-pandemic period.

The Ministry of Heritage and Tourism has acknowledged the fact that not enough has been done to promote Oman in several markets countries, and connectivity is still an issue. It may be noted that there are still no direct flights to several potential markets in China and Europe.

On the positive side, Middle Eastern airlines have been seeing continuous growth in demand, a 10.8 per cent year-on-year increase in demand. Capacity also increased 13.9 per cent year-on-year compared to March 2023.

In the post-pandemic, there has been an increase of 35 per cent in aircraft movement between 2022 and 2023 and a 47 per cent increase in passenger traffic at Muscat Airport.

The CAA has been optimistic about the scope for growth in the aviation sector in the Sultanate of Oman. The country is hoped to have six new airports, and most of them are expected to be operational by 2028-2029, according to Naif al Abri, Chairman of the Civil Aviation Authority.

In an interview, he said that as work is under way on the design of these new projects, the number of airports in the country will go up to 13, which will boost both domestic aviation for tourism purposes. The number of passengers using airports in the Sultanate of Oman will go up to 50 million passengers by 2040 from the current figures of 17 million.

Muscat Airport handled around 13 to 14 million passengers in 2023 and can handle up to 20 million passengers a year. With the budget already allocated, the new airports will also help to get more international traffic besides giving a boost to the logistics and tourism sectors in places by linking them with industrial areas of Salalah, and Suhar.

According to Elena Sorlini, the CEO of Zayed International Airport, budget airlines like Air Arabia Abu Dhabi and Wizz, which operate from Abu Dhabi, have bridged a demand mostly underserved but have also been proven to stimulate it. Since their launch in 2020, Wizzair Abu Dhabi and Air Arabia managed to gain an overall 22 per cent share of the market in 2023.

At the same time, Oman Air's 2023 results were the outcome of the implementation of the transformation programme’s second phase, which was initiated in March 2023, and included strategic changes to flight destinations for the 2023 winter season.

The airline also renegotiated many code-share agreements and terminated several sales agreements with companies that did not provide a direct benefit. An extensive study was conducted regarding the process of joining the Oneworld Alliance.

This year, 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 few destinations cancelled. However, the number of flights will be reduced, and the timing of flights will be optimised to suit the local market and inbound tourists.

SalamAir commenced its commercial operations in 2017 to meet the increasing demand for affordable travel options and generate opportunities for employment and business creation in various Oman sectors. It serves around 45 destinations, including seasonal, with A320neos, four A321neos, one A321 freighter, and more airlines are expected to join the fleet in the future. The airline transported 2.7 million passengers in 2023, an increase of 28 per cent from the previous year.