Oman Air is aiming to significantly narrow its losses over the next two years and be at least break-even by 2017 despite pursuing rapid expansion. The airline has accumulated operating losses of around USD1 billion over the last four years but is banking that achieving higher levels of scale and improving productivity will enable it to become profitable.
However, Oman Air will have to overcome huge challenges and intensifying competition as it rapidly expands its fleet and network. The government-owned flag carrier will need to further increase its reliance on transit traffic, which already accounts for 60% of its passenger traffic.
There will be opportunities to grow transit traffic, particularly in the Asia-Europe market, as its hub airport is upgraded and several new destinations are added. But Oman Air will need to succeed in a sector that has become extremely competitive and is generally low-yielding.
This is the second in a two-part series of analysis reports on Oman Air. The first report took an in-depth look at Oman Air’s new fleet plan. This report examines Oman Air’s recent performance and overall outlook, in particular its pursuit of more transit traffic, as it continues to expand rapidly.
See related report: Oman Air plans ambitious fleet expansion as 787s & 737s are acquired while ATRs & Embraers are axed
Oman Air reports another year of large losses in 2014
Oman Air reported on 28-Mar-2015 an operating loss of OMR96 million (USD249 million) for 2014, representing a 4% reduction compared to 2013. Revenues increased by 4% to OMR398 million (USD1.035 billion).
RPKs were flat while passenger numbers increased by 2% to 5.1 million. ASKs were up 2%, marking the lowest rate of capacity growth in over 10 years, as the flag carrier’s load factor dropped 1.6ppts to 74.4%.
Oman Air has grown rapidly since it shifted its business model in 2007, becoming a widebody operator and a full-fledged flag carrier with an intercontinental network. Previously it was a small but (modestly) profitable short-haul regional carrier.
While revenues have since nearly tripled, Oman Air has accumulated more than USD1.4 billion in operating losses over the last seven years. Annual operating losses have been at or approaching OMR100 million the last four consecutive years, leading to an accumulated loss of about USD1 billion since 2010.
Read More Source: CAPA – Centre for Aviation & OAG
However, Oman Air will have to overcome huge challenges and intensifying competition as it rapidly expands its fleet and network. The government-owned flag carrier will need to further increase its reliance on transit traffic, which already accounts for 60% of its passenger traffic.
There will be opportunities to grow transit traffic, particularly in the Asia-Europe market, as its hub airport is upgraded and several new destinations are added. But Oman Air will need to succeed in a sector that has become extremely competitive and is generally low-yielding.
This is the second in a two-part series of analysis reports on Oman Air. The first report took an in-depth look at Oman Air’s new fleet plan. This report examines Oman Air’s recent performance and overall outlook, in particular its pursuit of more transit traffic, as it continues to expand rapidly.
See related report: Oman Air plans ambitious fleet expansion as 787s & 737s are acquired while ATRs & Embraers are axed
Oman Air reports another year of large losses in 2014
Oman Air reported on 28-Mar-2015 an operating loss of OMR96 million (USD249 million) for 2014, representing a 4% reduction compared to 2013. Revenues increased by 4% to OMR398 million (USD1.035 billion).
RPKs were flat while passenger numbers increased by 2% to 5.1 million. ASKs were up 2%, marking the lowest rate of capacity growth in over 10 years, as the flag carrier’s load factor dropped 1.6ppts to 74.4%.
Oman Air has grown rapidly since it shifted its business model in 2007, becoming a widebody operator and a full-fledged flag carrier with an intercontinental network. Previously it was a small but (modestly) profitable short-haul regional carrier.
While revenues have since nearly tripled, Oman Air has accumulated more than USD1.4 billion in operating losses over the last seven years. Annual operating losses have been at or approaching OMR100 million the last four consecutive years, leading to an accumulated loss of about USD1 billion since 2010.
Read More Source: CAPA – Centre for Aviation & OAG
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