Muscat: Oman Air is becoming less dependent on government support, due to its recent strong performance, which has also helped reduce losses for the airline.
According to Oman Air’s financial results for 2015, loss per passenger was reduced by 42 per cent, owing to changes in fuel prices. In 2014, the government provided OMR130 million in financial support to Oman Air, which was then reduced to OMR54 million in 2015.
“Owing to the hard work of the commercial and operational teams, we were able to reduce that loss to OMR13.8 per passenger in 2015,” said Oman Air Chief Executive Officer (CEO), Paul Gregorowitsch, where the loss per passenger was OMR24 in 2014.
Looking ahead at 2016, Oman Air is planning to achieve a further 45 per cent reduction in loss per passenger. Government support will also be reduced to OMR35 million, compared with last year.
Despite the heavy capital cost, new equipment and buildings being constructed for Oman Air, Gregorowitsch is eyeing an 11.2 per cent in capital growth, including a 14.1 per cent growth in passengers and a 50 per cent growth in cargo. The Oman Air chief said the loss per passenger will further reduce from OMR13.8 in 2015 to OMR6.83 in 2016.
Oman Air’s passenger traffic is expected to surge 142 per cent to touch 22 million passengers by 2034, according to IATA.
The Sultanate’s economy is also set to grow by 6.2 per cent on an average for the next two decades and by 2034 it will see approximately 22 million passengers annually, according to an IATA spokesperson.
The Middle East region as a whole is set to be the joint-fastest growing region, along with the Asia-Pacific, at 4.9 per cent a year on average until 2034.
“That will lead to an extra 237 million passengers en-route to, from and within the region for a total market size of 383 million passengers,” Gregorowitsch told the Times of Oman (TOO). Aviation experts said the growth is foreseeable, with more airlines joining the Muscat skyline and Oman Air going on an expansion spree by buying new aircraft and introducing new destinations, such as Goa, Dhaka, besides increasing flights to several destinations in India.
Gregorowitsch also revealed that the government has supported them with OMR138 million for financing Oman Air’s expansion plans, which has resulted in an OMR420 million return in contribution to the Sultanate’s economy.
The OMR35 million in financial support from the government, which will be given to Oman Air will return OMR440 million to OMR450 million to the economy by the end of 2016.