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Oman Air to boost cargo operations by end of 2012

Airline CEO says cargo revenue has increased by 47 per cent.
NEWS, Aviation

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The CEO of Oman Air, the sultanate’s flagship carrier, is planning to ramp up the airline’s freight service and is aiming to turn Muscat into a major cargo transport hub, he told Arabian Business in an interview.

"Cargo is a vibrant industry in the UAE and we are seriously examining the prospect of introducing freighter operations. We really have quite a lot of freight coming into us,” Wayne Pearce, who was appointed CEO of Oman Air in January, said in an interview.

The airline reported earlier this month its cargo revenue increased by 47 per cent for the January to May period while cargo tonnage increased by 33 percent.

“We have got these light bodies that can carry 60 tonnes of cargo from the East and to Europe. We are putting a lot of emphasis to filling those up and, down the line, introducing a cargo operation in Muscat,” Pearce said.

“My goal would be to introduce that by the end of the year. I have to go through the proper processes but things are looking quite promising,” he added.

Pearce said he plans to initially use a specialist company to provide and operate the freighter for a fee. “It is a way of getting into the game without the commitment of buying a brand new aircraft and wondering whether it will work out or not.”

The move comes as rising fuel costs have taken a toll on the carrier’s balance sheet. The airline’s losses surged 41 per cent to OMR110m (US$285m) in 2011, compared with a loss of OMR78m (US$202m) in 2010, it announced in April.

Despite revenue in 2011 increasing 35 percent to OMR311.3m (US$808m) and the number of passengers carried rising 16 percent to 3.8m, a 38 percent surge in the carrier’s fuel bill pushed it further into the red.

The carrier is expected to run at a loss until 2014 as rising operational costs and surging oil prices squeeze margins, Philippe Georgiou, chief officer of corporate affairs, said on the sidelines of a travel event in Dubai in May 2011.

“We are in the second year of our five-year profitability plan, and we will continue to make decreasing losses until we break even in 2014,” Georgiou said.

“Oman Air is government-owned 100 per cent, but… eventually we have to have profitability. We are not going to be a subsidised airline forever.”
 

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