Flying High
Oman Air is rising to the occasion as the Sultanate emerges as the most favoured tourist destination in the region

While many airlines in the region have aggressive plans for expansion and are developing their home airports as global transport hubs, Oman Air’s strategy has been rather more measured.

Qatar Airways, for example, has an aggressive expansion strategy and hopes to rival Dubai-based giant Emirates, carrying many transit passengers. Oman Air, however, is focusing on serving the increasing numbers of businesspeople and tourists coming to Oman as an end destination.

Similarly, the recent flurry of publicity at the Dubai Air Show, where several Gulf airlines committed to radical fleet expansions, Oman Air gained little coverage. The airline signed deals to acquire a handful of aeroplanes, focussing instead on cost-effectiveness and flexibility.

Destinations
The airline’s choice of new routes is indicative of a careful long-term approach to expansion. It opened its first two long-haul destinations in November, selecting Bangkok and London, cities from which there is already a fair number of people flying to Oman. It is also seeking to develop some destinations partly through code-share deals with Gulf Air, following the Omani government’s withdrawal from that airline earlier this year, leaving it entirely in the hands of Bahrain.

Oman Air already has a large range of destinations in South Asia, reflecting the large number of people from the region who work in Oman. It also connects major cities across the Middle East to Muscat’s Seeb International Airport. In May, Oman Air agreed with Gulf Air that the Sultanate’s airline would develop routes in South Asia, while some destinations in Europe would be served by Gulf Air flights on a code-share basis.

On November 28, Oman Air started flights to the Thai capital, Bangkok, which will run five times a week. Bangkok’s Suvarnabhumi Airport will be Oman Air’s first destination in South East Asia and is expected to be a base for further expansion. Officials say that the route is targeted at businesspeople from both countries, as well as tourists from South East Asia. The airline has leased two Airbus A310s to run the route.

On November 26, the carrier started flights to London’s Gatwick Airport, which had previously only been a code-share destination. Oman has good relations and strong historic ties with the UK, so London was a natural starting point for Oman Air’s entry in Europe.

However, the choice of Gatwick, located to the south of London, may be questionable. The airport is more commonly used for charter flights and a small handful of budget airlines, with most major carriers preferring Heathrow, which is only connected to Gatwick by a notoriously congested motorway and complicated public transport network. It may not seem the ideal place to attract travellers from other destinations in Europe and North America. Also, British Airways, currently the only carrier flying direct to London from Muscat, and one of the few airlines connecting the Sultanate directly to Europe, flies from Heathrow.

Nonetheless, it seems certain that there will be more than enough traffic to sustain the link. There are increasing numbers of tourists visiting the Sultanate from the UK. Recent reports in the British press suggest that Oman is developing a reputation as a top-end cultural and natural tourist destination. It is said that Oman’s living folk traditions, historic architecture and stunning, varied scenery set it a notch above other Gulf states, and as locales such as Dubai become popular, Oman is being pegged as a more exclusive destination by the status-sensitive British media. Currently, around 100,000 British tourists visit Oman annually, with their numbers increasing every year.

Seeb Airport
Oman Air’s development and the appeal of Sultanates as a destination are likely to get a boost when the expansion of Muscat’ Seeb International Airport is completed.

Last year, 4.78 million passengers passed through the airport, up from 2.7 million in 2000. Seeb is now being expanded to have a total capacity of 12 million passengers a year by 2011, with a view to having a capacity of 48 million by 2050. Better facilities and greater capacity offers both opportunities and challenges for the national carrier, as more airlines will be able to access Muscat, increasing the competition that it faces.

This is even as the entry of more airlines will increase the visibility of the Sultanate and stimulate interest in it. If Oman Air can remain competitive, as it certainly seems set to do, it will surely benefit from any increased interest in the country. It will also be able to take advantage of the extra capacity and better facilities offered by the new terminal.
Oman Air chief executive Ziad bin Karim Al Haremi has explicitly stated he has the intention to open “many more far-away destinations”. London and Bangkok are described as the first bases for Oman Air, so we should expect more destinations in Europe and South East Asia. Here, what is clear is the intention to expand, albeit gently.

Fleet expansion
In keeping with its expansion plans and ensuring continued cost-effectiveness, Oman Air has undertaken to increase its fleet. Its choices reflect a characteristically cautious approach, aimed at serving more long-haul destinations in the long-term.

At the Dubai Air Show, Oman Air ordered five new Airbus A330 aeroplanes specifically to develop its routes to Europe and the Far East. The airline announced that it had chosen the three A330-300s and two A330-200s for the efficiency and passenger comfort that they provide.

Al Haremi said that the A330 fitted into the airline’s “long-term strategy to operate an efficient and reliable fleet with proven operating costs”, thereby hinting that the airline will compete on pricing with its rivals. Airbus claims that the A330 has the lowest operating costs in its class.

It appears that Oman Air is playing a straight bat by purchasing what manufacturers refer to as “the industry standard in the 250 to 375 seat category”.

The operating costs of the A330 are reduced by its high “commonality” – that is similarity in essentials to other Airbus aircraft. This reduces the amount of time needed to train pilots and crew for the new model, and a reduced number of unique parts needed by maintenance engineers.

Oman Air has not gone down the path of Qatar Airways and Royal Jordanian in ordering its own Boeing 787 Dreamliners, which despite being a best seller, has been beset by delays and criticism of its construction.

Other airlines have been snapping up brand-new models such as the hyperbolically named Dreamliner and the Airbus A380–the largest passenger airliner in history. However, Oman Air has eschewed novelty and opted for reliable workhorses; the A330-200 entered service in 1998 and the A330-300 back in 1993.

The Sultanate’s carrier has at least signed a memorandum of understanding to lease six 787s from Aviation Lease And Finance Company (ALAFCO), a Kuwait-based aircraft leasing firm. ALAFCO is expected to receive the Boeings destined for Oman Air in 2012, 2014 and 2015.

Some of these models have ranges of up to 15,500km, putting North America within reach. This would appear to fit with the airline’s development strategy of gradually opening up long-haul destinations.

Oman Air is perhaps rightly not making a bid to be the next Emirates. Its development strategy is to deliver more people to Oman at reasonable cost. It is certainly not at risk from “imperial overstretch”. Time will tell if the choices of Bangkok and Gatwick as the building blocks were the right one.

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