Oman Air to launch budget airline

Muscat: Oman’s national carrier, Oman Air, could soon launch a low-cost no-frills airline, according to Darwish Bin Esmail Al Beloushi, Minister Responsible for Financial Affairs and Chairman of Oman Air Board of Directors.

Addressing the local media on Saturday, the company chairman said that the company had got the government approval in principle. He added that the company was in the process of conducting a feasibility study for starting the budget carrier. “The study is expected to be completed this or next year,” he revealed.

Al Beloushi also revealed that last year, Oman Air injected 85 million Omani riyals, by issuing shares for the government, to raise its issued capital to 451 million riyals.

The Minister said that Oman Air plans to add 20 aircraft to 30 already with the company. “We are expecting six Boeing 8787s, 11 Boeing 737s and three Airbus A330s in next five years,” he said.

Al Beloushi is also optimistic about increasing company’s share of travel traffic through Muscat International Airport higher than current share of 50 per cent.

Talking about the company’s performance in 2012, he said it had been good as the revenues showed growth of 21 per cent to 347.42 million riyals compared to 2011. The company cut down its losses by 11 per cent to 97. 467 million riyals in 2012 compared to 109.860 million riyals in 2011.

He attributed the losses to the long term investments in the purchase of new aircrafts and going ahead with the expansion in the destinations network by adding new destinations and increasing the number of flights to the current destinations.

He also attributed losses to the increase in the price of aviation fuel, the additional manpower costs due to amendments of the Omani labour law, including five-day week that, he added, meant recruitment of more staff.