Oman Air is reversing its fortunes: 1,100 job cuts, fleet overhaul, focus on tourism

Dubai: Oman’s national carrier said it has slashed its reliance on transit passengers from 85 per cent to under 50 per cent in just over 12 months, marking one of the most dramatic strategic pivots by any Middle Eastern carrier in recent years.

The airline’s CEO, Con Korfiatis, revealed the extent of the national carrier’s transformation, which has included disposing of its entire Airbus A330 fleet, cutting more than 1,100 jobs, and refocusing the airline around Oman’s tourism potential rather than competing head-on with Gulf mega-carriers.

"We were never going to win a game that’s structured that way," Korfiatis said, referring to the carrier’s previous heavy dependence on transfer traffic. "Our future lies around our USP, and our USP is Oman."

The Muscat-based carrier has undergone a comprehensive fleet rationalisation, removing what Korfiatis described as "insane" complexity from its operations.

"We had 20 aircraft, and in 20 aircraft, we had six different sub-types. That's just insane," he said. The airline disposed of its entire 10-aircraft A330 fleet whilst also selling its first two Boeing 787-8s, consolidating around the more efficient 787-9 variant.

The carrier now operates approximately 23 narrow-body aircraft, mostly Boeing 737 MAXs, and 10 Boeing 787-9s. Two more MAX aircraft are due for delivery, one in the coming weeks and another in Q1 2026, whilst six additional 787s are scheduled from 2027 onwards.

Korfiatis revealed the fleet disposal was partly opportunistic, capitalising on strong demand for pre-owned aircraft amid ongoing delivery delays from manufacturers. "They had an artificial value in the current landscape," he explained, adding that the sales helped address the airline’s "horrible level of debt".

The transformation has come at a cost. Oman Air's workforce has shrunk from approximately 4,300 employees to just under 3,200—a reduction of more than 1,100 positions.

However, Korfiatis defended the cuts as necessary, arguing the airline was "incredibly overstaffed" by industry standards. "If you looked at the number of staff we had for the size of our fleet, we were off the charts compared to all our neighbours and to all relevant benchmarks we could find," he said.

Despite the redundancies, the CEO noted that Omanisation levels have actually increased to 80 per cent, the highest in the company's history. He added that the airline is now "doing more work than we were doing before, and we're doing smarter work than what we were doing before, with far fewer people".

Future hiring will be driven by fleet growth, with additional pilots, cabin crew, and engineers required as new aircraft arrive.

Whilst contracting significantly in South Asia—where it was making "the majority of our losses" on low-yield transit traffic—Oman Air has been investing heavily in European connectivity.

Over the past year, the airline has launched year-round services to Moscow, new flights to Rome and Amsterdam, and will restore a second daily service to London Heathrow in late October.

"Europe tends to be high-yield, affluent leisure markets, not so price sensitive," Korfiatis explained. "That’s a particular sort of demographic" that aligns with Oman's tourism push.

The UAE remains essential, with five daily flights to Dubai during peak season and daily service to Abu Dhabi through a codeshare with Etihad Airways. Korfiatis said business travel between Oman and the UAE is "probably the fastest growing segment", driven by economic transformation in Oman.

Perhaps the most significant strategic move has been Oman Air’s entry into the Oneworld alliance, which Korfiatis described as providing a “global platform” for the carrier. “Our own network is 42 international routes. Together with existing bilateral partnerships, that took us to about 90 routes. With the Oneworld overlay, we now have 900 routes," he said.

One World is a group of leading airlines that offer members frequent flyer benefits and global lounge access, allowing travellers to book flights and earn rewards across the alliance's network.  

The alliance opens up North America through American Airlines and the IAG group’s transatlantic network, Northeast Asia through Cathay Pacific and JAL, and Australia through Qantas—all markets Oman Air cannot serve efficiently with its modest fleet of 10 wide-body aircraft.

The airline has made substantial changes to its cabin offerings as well. First Class, which achieved just an 8 percent load factors in 2023, has been eliminated in favour of the "Business Studio".

“All of a sudden, now that front-end product is running 70 per cent seat factors. We've taken it from empty cabins to doing quite well," Korfiatis said.

The carrier has also introduced all-economy configurations on aircraft serving South Asian markets, though Korfiatis insisted this doesn't make Oman Air a low-cost carrier. "They get the full normal economy-class service. They get a meal. They get frequent flyer points. They have a premium airline seat."

For its European routes, Oman Air maintains its award-winning business-class product, which features what Korfiatis claims is "the longest business-class seat that exists in the world".

All this is paying off. The Omani airline flew 200,000 passengers in the period between January and June this year, compared with 75,000 passengers in the same period in 2024.

Still, Korfiatis acknowledged that the airline was "a bit late to the party" compared to other legacy carriers that underwent similar transformations years earlier. Still, he said the airline is accelerating what would typically be a five- to seven-year process into three to four years.

"So far, the targets we've set for our transformation, we’re meeting. So we’re pleased," he said.

The CEO identified two main risks: global economic shocks similar to those caused by COVID-19, and the enormous aircraft orders being placed by regional competitors.

"I have a table that I show our board quite often, about the size of the aircraft orders that sit within a two-and-a-half-hour flight range of this place. It’s phenomenal, mind-boggling, and potentially scary," he said.

However, Korfiatis expressed confidence in the airline’s ability to navigate challenges, noting that being a midsize carrier offers advantages in agility. "You have a huge ability to be agile. We're smaller, so we can manoeuvre a bit faster."

Looking ahead, Oman Air anticipates resuming growth from 2027 onwards, with existing orders covering its requirements through 2030. The carrier has already grown year-on-year in 2025 despite the fleet reduction, and has "refreshed the five-year plan" with identified routes and aircraft requirements.

"Oman is far from exploited in terms of being a country and a destination people are aware of," Korfiatis said. "We have so many people that we need to touch to introduce Oman to them and show them the wonderful things that we have here."