Oman seeks investors for new low-cost airline

Alamy via Reuters

• ‘Investment opportunity’ announced
• Oman Air expects delayed recovery
• Middle East tourism figures soar

Oman plans to launch a new low-cost airline amid a global tourism rebound and the continued expansion of the Gulf state’s aviation sector.

In a post on the social messaging platform X (formerly Twitter), the country’s civil aviation authority (CAA) announced an investment opportunity for a new low-cost airline operator in the sultanate.

No further details were given.

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Aviation industry experts in April told AGBI that despite state-backed Oman Air posting higher revenues for 2023, it still faces difficult times ahead.

The flag carrier reported that losses increased by 36 percent year on year in 2023, while revenues were up 30 percent.

“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.

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

• Airport chiefs size up ways to meet GCC airspace demand
• Oman Air cancels flights to South Asian cities
• Oman Air 2023 losses down 25% on higher ticket sales

CAA chairman Naif Al Abri said this week that work is underway on designing six new airports, most of which are expected to be operational by 2028 and 2029.

Oman Airports in April said profit had surged 45 percent to OR18.5 million ($48 million) in 2023, compared to almost OR13 million in 2022 as passenger numbers had increased.

However, the airport operator expects a delayed recovery compared to other GCC countries due to Oman Air’s ongoing transformation.

According to the UN Tourism’s annual barometer, the Middle East received more than 87 million international tourists in 2023 – up 22 percent on the pre-pandemic figure for 2019.

The report by aviation consultancy OAG said the UAE and Saudi Arabia are the region’s biggest markets, accounting for 61 percent of total airline capacity, while Qatar is the fastest grower.