Oman Air: Small player, big dreams

Content to remain in the shadows – at least for the moment – Oman Air has shown that it means business. Though its cargo department has contributed nine percent of the carrier’s total turnover, there are enough indications that cargo volumes are set to grow. But the question remains, whether the carrier’s plans for cargo growth face speed breakers now that CEO Paul Gregorowitsch has resigned. Sharang G finds out more.


Though the carrier officially states
that it was founded in 1993, its origins
can be traced back as far as 1970,
beginning as Oman International
Services, handling civilian aircraft. It
has been regarded by the government as
a major driver of the nation’s economy.

The designated carrier of the Sultanate
of Oman, its ownership has been in
the hands of the government of Oman.
Growing from a regional player, today it
is an official 4-star airline (Skytrax 2011),
that regularly receives accolades from
Asia, Middle East, Africa and Europe.

Awards aside, the carrier has not
exactly been making money and the
CEO was blunt about it. “We are still not
profitable,” he said. He was also candid
about the market being crowded, and
the prices becoming more competitive.

In fact, like the other players in the
region, Oman Air has seen low yields
over the past year. In addition, it has had
to contend wiThinfrastructural delays
– the primary among them the new
airport terminal at Muscat International
Airport. This has restricted the carrier’s
growThand efficiency.

However, the CEO merely described
the difficult circumstances as “a little
headwind,” though he went on to point
out that if the economic downturn
continued, then the carrier would have
to delay the induction of 68 aircraft by
2020 to 2022.


Special Cargo Products

The “headwind” notwithstanding,
Oman Air Cargo has moved ahead in their quest to “become the best” and
recently signed a five-year contract
wiThunit load devices (ULD) provider,
Jettainer. Part of the move to outsource
its non-core activities – a noticeable
trend in the air freight sector nowadays
– the agreement granted Jettainer the
management rights to Oman Air’s
loading equipment. The step was in line
wiThthe carrier’s commitment to reduce
greenhouse gas emissions. By utilizing
lightweight ULD, built of carbon fibre
and partly recycled composite material,
CO2 emissions are lowered measurably.

The move will simultaneously improve
the carrier’s payload and increase its
fuel efficiency.

On its part, Jettainer claimed
that wiThtheir “highly efficient ULD
management scheme,” Oman Air’s
current container fleet could be reduced
by about 20 percent, totalling 1,200
units in future. Among the ULDs
being used by the carrier are around
600 older aluminium AKE containers.

These outdated devices are scheduled
to be replaced by the state-of-the-art
environmentally friendly lightweight
AKEs. In addition, 200 lightweight
containers will be added to the carrier’s
fleet as part of the intended expansion
in the near future.

Commenting on the contract,
Mohammed Al Musafir, senior vice
president, Commercial Cargo, said “the
agreement wiThJettainer comes at a time
of excellent growThand modernisation
of the cargo division, as we continue
forward wiThour aggressive growThplan.” He also mentioned that the
agreement would ensure that Oman Air
Cargo’s clients would be given the kind
of service that would be in line with
leading industry standards.

Similar top of the line services for
cargo clients would also be provided
by the cargo division’s valuable product,
“Secure Vault”. Showcased at Air
Cargo Europe 2017, Secure Vault is a
secure solution designed wiThsecurity
as the leading feature, for precious
consignments like jewellery, precious
metals, or even currency. Along with
a custom-built VAL storage area
incorporating state-of-the-art security
technology, security personnel escort
all valuable consignments to and from
the aircraft.

Speaking about the product,
Mohammed Al Musafir said, “Secure
Vault is one of a number of special cargo
products our division will be focusing
on as we proceed to better define our
products and services for our clients,
assisting them in better selecting the
service they require depending on the
type of consignment being transported.

Our clients can rest assured that their
consignments will be transported and
delivered wiThthe utmost attention
to security.”

Affiliations

Cargo received quite a boost in
March 2015, when Oman Air and
Luxembourg’s cargo airline Cargolux
completed a cooperation agreement
that enabled Cargolux in sea-air
freight transport from Oman’s
modern port. This was in line with
what the CEO had planned. In fact,
Gregorowitsch mentioned that the
combination of ocean-air transport
was a very interesting area. The
agreement included an introduction
of Cargolux’s full freighter services
from Luxembourg to Chennai in India via Oman. At that time, Abdulrahman
Al Busaidy, Oman Air chief operating
officer had commented that “Our
product advantages include the carriage
of project cargo, livestock, cargo
aircraft-only freight, odd-sized cargo,
vehicles and aircraft engines”. He also
mentioned that the new service with
Cargolux would make an even greater
contribution to the development of
Oman as a global cargo hub.

Cargolux expanded its Oman flights
during 2015 wiThonward connections
to Indian cities. Incidentally, Oman Air
also provided Cargolux wiThaccess to
the belly capacity of its passenger fleet
that touched destinations on the Asian
continent as well as Eastern Africa.

However, although today the joint
venture agreement continues, this is
on a muted scale. While earlier, there
was a guarantee of a certain volume of
freight from Oman Air, the deteriorating
economic conditions forced it to step
out of the agreement. The cooperation
wiThCargolux continues, but to a lesser
degree and without guaranteed volumes.

While specialised cargo products
have helped the carrier gain clients, its
ties wiThSingapore-based SATS Ltd
has given it a distinct identity starting
wiThan online Cargo Management
System (CMS) and a corresponding
website, www.omanairsats.com, that has
marked the company’s presence in the
aviation industry.

As the premier cargo operations
handler at Muscat International Airport,
Oman Air SATS will strengthen Oman’s
position as a transit hub, promoting
Muscat as the cargo gateway to the
Middle East. The company provides
handling services to and from Muscat
for a wide range of cargo, including
pharmaceutical products, perishables,
live animals and valuable items.

The establishment of Oman Air
SATS, according to Khalifa Al Bahlani,
Corporate Development manager will
make it the “premier cargo handling
company in Muscat. WiThthe
competence and expertise of two worldclass
organisations, namely Oman Air
and SATS Ltd joining hands to form this
cargo entity, we rightly pride ourselves
on our ability to offer guests the best
possible services. The introduction of
the new CMS system, utilising state-ofthe-
art technology, will certainly help us
achieve this. The system, together with
our new website, means we can offer an
unrivalled service in the Middle East.”
The introduction of CMS – deployed
successfully at some of the world’s
major airports including Singapore,
Hong Kong, Beijing, Taiwan, Indonesia,
Vietnam, Delhi and Bangalore – replaced
the old cargo handling system, Cargo
Wings, at Muscat International Airport.
The new system, designed exclusively for
cargo handling at air terminals, provide
faster and more efficient processing of
air cargo in and out of Muscat.

Oman Air’s recent participation at
one the leading air cargo industry events,
Air Cargo Europe 2017, has enhanced
its reputation as a cargo carrier. Oman
Air Cargo tied up wiThOman Airports
Management Company (OAMC), to
promote the country as a strategic
regional cargo hub, wiThmajor logistics
projects and developments, even as
the Sultanate of Oman shifts its focus
towards logistics as a major pillar for
economic growth.

The carrier’s long-term vision has
cargo as a major driver and for that, the
freighters could well be inducted sooner
rather than later. Realising this long-term
vision would definitely mean continuing
the work that has already commenced in
order to raise the bar on all the wings of
the carrier – which, of course, includes
cargo. But now that Paul Gregorowitsch
has resigned, the question remains, will
the ten-year strategic plan slow down or go ahead as planned?