MUSCAT: A four-year transformation plan adopted by national carrier Oman Air to enable a return to operational profitability by 2027 does not envision any immediate plans for investments in new aircraft, a top official has revealed.
Regardless, at least eight new aircraft deliveries are anticipated over the next 12 months under the company’s existing order book, says Oman Air CEO Con Korfiatis.
The Australian national, who joined Oman Air in May this year, is helming the financially beleaguered carrier’s transformation strategy, which prioritises the rightsizing of operations and efficiency improvements across the board.
“There is a master plan, which has been signed off,” remarked Korfiatis in an interview to AeroTime, a global multi-channel aviation digital hub providing news, events and advisory services to the aviation world. “I was brought in to lead the team and build the capabilities that allow us to deliver on this within the terms of the national tourism and economic agenda and Oman’s Vision 2040 programme.”
The transformation plan was already underway when Korfiatis joined wholly state-owned Oman Air two months ago. “Some good steps were taken during 2023 and what I’m working on now is accelerating that. That’s what we’re going to be pushing through the balance of this year and into 2025 and 2026,” noted.
Eng Said Hamoud al Maawali, Minister of Transport, Communications and Information Technology, who is also Chairman of Oman Air Board of Directors, recently warned that “radical improvement” is critical to the goal of returning the carrier to profitability.
The carrier lost around RO 185.6 million in 2023, adding to a cumulative loss of RO 2bn at the operating level since 2011, Al Maawali revealed in the company’s 2023 Annual Report. Following loans of RO 392 million taken by the company over the last five years, the airline’s debt position as of December 2023 remains “unsustainable”. Long term liabilities (debt and leases) reached RO 1.6 billion in 2023 versus RO 0.8bn-RO 0.9bn in 2018-2019, and future cash flow projections are insufficient to fund operations and investment requirements without further state cash injections, he said.
“Equity is negative at RO 1.4bn, and the value of Oman Air’s asset base has nearly halved since 2019 as challenged prospects have driven heavy impairments. The business needs to achieve financial sustainability by getting to a position of generating positive cash flow, and it is now imperative that Oman Air swiftly evolves from a business run as a state-sponsored carrier to a self-sufficient commercial enterprise,” the Minister stressed.
In his interview to AeroTime, the new CEO underlined the need for a “measured” approach in improving the carrier’s financial and operational performance. While rightsizing is integral to this strategy, investments in new jets are not on the immediate horizon, he cautioned.
“Don’t expect any new aircraft orders, not in the next six months or 12 months at least,” he said. “We’ve got to focus on our transformation and on fixing our foundations. There’s nothing we want to get in the way of that.”
As part of the rightsizing strategy, Oman Air phased out its aging fleet of widebody Airbus A330s in March this year. As for the rationalization of the rest of the fleet, Korfiatis stated: “We will look at the product going forward, over the next six months. Whether there’s anything that comes out of that, we’ll see. We do have some deliveries still pending in our existing order book: three B787s and three B737 MAX arriving this year, and two more MAXs arriving in the first six months of 2025. We’ll also think about the future of our existing 787 fleet, particularly our –8s, because we’ve got two of those. We certainly will be keeping our -9s. It’s a work in progress.”
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