Oman could have a low-cost carrier by first half of 2014
The sultanate will have at least one low-cost carrier (LCC) by the first half of 2014 with the possibility of more licences being awarded, according to Salim Nasser Said al Aufi, chief executive officer of the Public Authority for Civil Aviation.
Speaking to mediapersons on the sidelines of the Arab Aviation and Media Summit at Salalah's Hilton Hotel on Wednesday, Aufi said the Authority is studying all civil aviation services that are not currently available in Oman, including budget airlines, executive aviation and helicopter aviation.
He said, "We are looking at restructuring the aviation sector, including some of the companies. The next two-to-three years will see a lot of work and the aviation business in Oman will be changed completely."
Low-cost carriers currently enjoy a seven to ten per cent share of the Oman market, which is dominated by foreign low-cost airlines such as flydubai, Air Arabia, Indigo and others.
"In the most developed markets the share of low-cost carriers is roughly 20-30 per cent. This shows that the Oman market holds great promise and that is why we want to introduce a local low-cost carrier that can serve the local market," he added.
On whether the new carrier will be a subsidiary of Oman Air or a new airline, Aufi said, "We are looking at all the options, including a private low-cost carrier and an Oman Air subsidiary. It will depend on the proposals we have on the table. I am aware of two-to-three private investors who are studying the market, as is Oman Air. So we should have about three-to-four players competing for the licence. As of now I do not know how many licences will be awarded. Our own study will determine the number of licenses. We do not want to flood the market but also don't want to starve it either."
On when the licence for the first LCC is likely to be issued, Aufi said, "If not by the end of this year, then I would say in the first half of next year, by which time we would have landed another player. The carrier will cover both the local and international markets."
Aufi was the guest of honour at the summit, which was organised by Air Arabia in association with the Ministry of Tourism, Airbus, CFM and CNBC Arabia.
He added that only local investors would be allowed to operate LCCs, but they could opt for international technical or financial backing.
"We also want to see huge local content. If it is a private company then we would be certainly pushing for it to be floated in the market within the next five-to-seven years so that more people can benefit from it," Aufi said.
"The market share for budget airlines will increase in Oman. An increase in market share to 10-15 per cent is expected with the introduction of a local carrier," he added.