Salalah: Oman expects as many as four investors to compete for a licence to operate a new low-cost airline to challenge regional carriers flydubai and Air Arabia and lure business travellers and tourists to the Sultanate.

The Public Authority for Civil Aviation (PACA) may award the contract either to a local private company or a subsidiary of state-owned carrier Oman Air, PACA chief executive officer Salim Al Aufi told reporters at the Arab Aviation Summit in Salalah on June 26.

If the licence is awarded to a private company the airline could be listed on a stock market within seven years, he said.

“Over the next two to three years, the aviation business in Oman will change completely, I’m absolutely certain,” Al Aufi said.

“Our own study will determine if we need one or two licences, depending on the market. We don’t want to flood it, but we don’t want to starve it,” the PACA chief executive officer said.

Tourism infrastructure

Oman, which has a population of three million people, is developing its tourism infrastructure to support economic growth that is expected to dip to 3.9 per cent in 2014, compared with 4.4 per cent this year, according to the median estimate of economists.

About 2.1 million people visited the beaches, mountains, and souks of Oman last year, 50 per cent more than the 1.4 million in 2011, government statistics show.

Low-budget travel is a growing industry in the Middle East, fuelled by both tourism and business travellers looking to cut costs.

The UAE-based Air Arabia PJSC increased passenger numbers by 18 per cent in the first quarter and fills about 80 per cent of seats, said chief executive officer Adel Abdullah Ali.

Low-cost carriers have a five per cent to seven per cent share of Oman’s aviation market, led by foreign carriers such as Dubai-based flydubai, Air Arabia and India’s Indigo, according to Al Aufi.

“Hopefully we can increase it, that’s why we want to introduce a local low-cost carrier who can then really serve the local market,” he said. “We are not expecting Muscat International to be a hub in the same way as Dubai or Abu Dhabi or Doha.”

The government wants to position Muscat and Salalah as destinations for attracting people directly to Oman as opposed to as transit passengers, he said.

Oman is investing about $7.5 billion in the expansion of international hubs at Muscat, the capital, and Salalah, as well as three regional airports, Al Aufi said.

PACA will award contracts for repair and maintenance and a new cargo terminal at Muscat International Airport by the year end, he said. Tenders to build terminals and control towers at the regional airports will be put out within months.

Muscat International Airport will have a capacity of 12 million passengers after phase one of its redevelopment in 2014, compared with an expected 7.5 million travellers in 2013, according to the Oman Airports Management Company website.

The figure could reach 48 million by phase four of the plan.

The Sultanate is covered mostly in desert yet has beach resorts and mountainous regions at both ends of the country.

Tourism in the Sultanate spikes in the July monsoon season, when parts of the country transform into lush, green landscapes and temperatures drop below 30 degrees — a contrast with skyscraper-dominated, sweltering Gulf cities like Dubai.

source:  Tims of Oman