Revenue up at Oman Air but pressure still on, say experts

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• Net losses at flagship down 36%
• Revenues rise by 30%
• Load factor increases by 9%

Oman Air has posted increased revenues for the past year but the sultanate’s flag carrier still faces difficult times ahead, aviation industry experts say.

The heavily indebted airline launched a restructuring process last August in an attempt to balance the books within the next four years. 

Oman Air’s net losses in 2023 fell by 36 percent, while revenues were up 30 percent.

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“A 30 percent improvement in revenue is encouraging but operating costs will have increased, removing a large proportion of that benefit,” said John Grant, a partner at the UK-based consultancy Midas Aviation.

A detailed breakdown of the company’s financial performance was not provided.

Oman Air has retired its Airbus A330 aeroplanes, which made up almost half of its wide-body fleet. Boeing 737 aircraft will replace them on a selection of the longer routes.

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There are rumours of redundancies to come at the carrier, which has cancelled operations to destinations including Islamabad, Lahore, Colombo and Chittagong. It will also be reducing frequencies to certain markets.

Oman Air’s load factor increased by 9 percent last year as it carried more than six million passengers, operating more than 45,000 scheduled flights.

Grant said: “It is very likely that the connecting traffic that Oman Air carries going forward will be some of the lowest yielding in the market and their reliance on local market demand will increase, which in turn will increase the pressure.” 

Competition in the Middle East aviation industry is intensifying with the launch next year of Riyadh Air in Saudi Arabia, alongside the giants of the sector, Emirates, Etihad Airways and Qatar Airways.

Oman Air has long talked about a potential merger with the country’s budget carrier, SalamAir, although nothing has materialised.

Strategic decision

Linus Bauer, managing director of the Dubai-based consultancy company BAA & Partners, said: “Such a move could be seen as a strategic decision to consolidate operations, reduce costs and increase competitiveness in the region.” 

It was announced last month that an agreement with the English Premier League side Chelsea to become the side’s official travel partner had been terminated. 

Said bin Hamoud al-Ma’awali, the minister of transport and chairman of Oman Air, said at a media briefing on Saturday that the airline did not incur any losses as a result of the termination.

In November last year Oman’s Ministry of Heritage and Tourism unveiled an ambitious plan to increase the number of tourists to 11 million by 2040

The aim is to raise the tourism sector’s contribution to GDP from a modest 2.4 percent in 2021 to 5 percent in 2030 and 10 percent by the end of the next decade.