NEWSLETTER

Economics Last modified on May 10, 2015

Arabian flights

Graham Newton talks to Oman Air CEO, Paul Gregorowitsch, about the airline’s strategy and its role in the wider economy. 

Tell us about your strategy for the airline, including the expansion and the efficiency programme?

Oman Air is guided by a development plan that was endorsed by the board of directors in 2013. This sees our company invest significantly in new narrowbody and widebody aircraft, new destinations, technology and staff.

In line with the plan, the size of our fleet is expected to increase to 50 aircraft by 2018, with a further increase to 70 aircraft being achieved by 2020. 

Late in 2014, the first of the Airbus A330s and B737s we have on order were delivered. We also opened four new destinations, to Duqm, Sohar, Manila and Jakarta last year, and will be adding Goa, Singapore and Dhaka this year. If there are further additions to our network in 2015, we will announce them closer to the time of their launch. In addition, we have increased frequencies on a number of our established routes.

The new aircraft and destinations have helped us to increase the range of choices we offer and to boost the level of services offered to our valued customers. 

Building on a range of recent innovations and services, our customer experience has undergone further improvements. On the ground, our first class and business class lounges are currently being refreshed, so that they will soon offer even greater comfort and convenience. In addition, we have unveiled new premium class security clearance at Muscat to complement our premium check-in facilities.

In parallel with this ambitious expansion programme, we have held fast to two fundamental aims: to ensure that every Oman Air customer experiences the best possible products and services; and to pursue our unwavering commitment to achieving profitability. 

 

How will you position the airline in the market given such powerful competition in the Gulf?

Oman Air does not define itself against competitors – other carriers in the region have very different business models. Instead of being a generic ‘Gulf carrier’, Oman Air offers a unique expression of Omani hospitality, culture and identity. 

We also focus on every aspect of the passenger experience. We offer competitive pricing via our website, call centre and travel agent partners. You can now check in online up to 36 hours before departure.

Our lounges at Muscat, Salalah and Bangkok – as well as those we offer through our partners in other destinations – are excellent.

And, of course, our premium customers are able to enjoy the convenience of door-to-door limousine services in many of our destinations. We even offer a lounge-to-aircraft limousine service for first class passengers at Muscat.

In the air, we operate a young, extremely reliable and rapidly expanding fleet. These ‘hard’ products are complemented by high quality service and excellent inflight dining. Furthermore, we were the first airline in the world to offer both Wi-Fi and mobile phone connectivity, and we still lead the field in this respect.

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How are you looking to develop your network?

Throughout its existence, Oman Air has operated a point-to-point model. This has served us, and the Sultanate of Oman, well.

An important part of Oman Air’s mission is to bring as many visitors as possible to Oman. The consistent growth in our passenger numbers parallels the growth of visitor numbers to Oman, so we have been achieving our mission.

The expansion of Oman’s airports, most significantly in Muscat, offers potential for even more visitors. Coupled with the expansion of our fleet this means that we will bring more visitors to Oman for a long time to come.

We will, however, be expanding our network significantly over the next few years. It is inevitable that a proportion of customers from those new destinations will want to transit in Muscat to onward destinations. Balancing our commitment to bringing more people to Oman with increasing ‘hub’ traffic will be an interesting challenge.

 

What new destinations are of interest?

As mentioned, at the end of last year, we launched services to Jakarta and Manila, as well as to Duqm and Sohar in Oman. This year, we have already announced new services to Singapore, Goa and Dhaka. We may announce more new destinations, but you will have to wait and see!

In terms of increased frequencies, we are aiming to operate daily flights to many of our major destinations. That process has started with increased frequencies to many of our destinations across India. 

In time, it may be possible to operate double-daily to the UK. We would very much like to offer daily flights to Paris, but that is proving difficult at the moment due to restrictions by the French government.

 

Can an airport tempt you to provide service with incentives or do you have very fixed ideas about where your next new routes will be?

Incentives can often be helpful, but our over-riding consideration is that every route should have the potential to be profitable. We have a very flexible approach to our network design and that flexibility will only increase with time. 

Therefore there are few, if any, destinations that are beyond our reach. 

With the precondition of economic viability, we are happy to consider any destination that has the potential to deliver healthy two-way traffic.

 

Oman’s airports have an equally ambitious development programme. Are you happy with it?

Oman’s airport development programme is very exciting. It was wonderful to see an Oman Air jet become the first aircraft to land at Muscat’s new second runway in December last year. 

While Oman Air’s airport services teams handled 8.7 million passengers at Muscat last year, the new airport will be able to welcome up to 12 million passengers a year. The next phase of development at Muscat will increase that capacity to 20 million people per year.

Such expansion offers Oman Air great opportunities for increasing the number of passengers our airport teams engage with. It also means that Oman Air will be able to operate more international and domestic flights out of Muscat and there is great synergy with our own expansion programme.

However, airport operator, Oman Airports Management Company (OAMC) is also developing a series of regional gateways. Salalah International Airport has been further developed over recent months, and new airports at Duqm and Sohar have been opened. Further new airports at Adam and Ras Al Hadd are due to come on stream soon. 

We already operate from Muscat to Salalah, Sohar and Duqm, as well as to Khasab, but the new airports mean that Oman Air’s options for operating a comprehensive domestic network are significantly increased.

Increased airport capacity also means that we are able to further increase our cargo operations. Building on previous cargo initiatives, we recently took a further step by creating a partnership with Cargolux. This will cover full freighter operations and strengthen Oman’s position as a hub for cargo being transported between Asia and Europe.

This activity has required close co-operation between Oman Air and OAMC. We have worked together very productively for many years and the results will be clear when the new facilities open at Muscat International Airport.

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