Upgrades positioning Oman as an aviation centre

Airport infrastructure is developing quickly in Oman, with over $12bn invested in the sector since 2010, and another $6.1bn earmarked through 2020-21 to support the completion of new regional airports and major terminal projects at two international airports. Oman currently operates three regional airports at varying levels of completion, one primary international airport in Muscat, and a secondary international airport in Salalah that provides service to regional destinations as well as a few intercontinental charter services from Europe.

Record performance at Oman’s airports in 2015 was driven by the rapid growth of national carrier Oman Air. Air India, flyDubai, Qatar Airways and Turkish Airlines also recorded double-digit increases in traffic through Oman during 2015. As more airlines begin service to the sultanate, and Oman Air introduces new destinations, such as Goa and Dhaka, future growth is anticipated. According to the Montreal-based International Air Transport Association, Oman’s air passenger traffic is projected to rise at an average annual rate of 6.2% to reach 22m passengers per year by 2034.

All the major players at local airports – the Oman Airports Management Company (OAMC), Oman Air and the Public Authority of Civil Aviation – are government owned and coordinate closely on the sector’s development strategy. As part of OAMC’s five-year strategic plan – “Growing gateways to beauty and opportunity” – the firm has set its sights on a top-20 international ranking for Oman airports. It also plans to operate at least 10 local and international airports by 2020.

Muscat Airport

Total passenger traffic through Muscat International Airport increased by 18.9% year-on-year during the first five months of 2016 to reach 4.8m passengers, up from around 4.04m in the same period of 2015. The increase is the result of Oman Air’s rapid growth, which was supported by the introduction of two Boeing 787 aircraft in 2015, and a growing number of flights operated by existing airlines, such as Bangladesh Airlines, Etihad Airlines and SpiceJet.

New routes from the airport in 2015 provided service to Singapore and Goa, as well as to Tehran and Kish Island through Caspian Airline and Kish Airline, respectively. Landmark initiatives under way at the airport are aimed at positioning Muscat International for strong investment growth over the coming years. A new terminal at the facility is currently being finished for launch, to be followed by the transition and re-dedication of the existing terminal for use by low-cost carriers, among other users.

The existing passenger terminal at the airport, dating which dates from the 1970s, has been expanded several times in order to cater to growing passenger numbers, but lacks jet-bridges and employs bus-boarding for all operations. Upon completion of the first phase of the new terminal, capacity at Muscat International Airport will rise to a total of 12m passengers annually, more than double its current throughput.

According to the Ministry of Transport and Communications, work on the terminal was 86% finalised in February 2016, with full completion anticipated by end of year 2016, followed by a trial phase of between four and six months. OAMC has also announced plans to promote the development of an Airport City around Muscat International Airport, comprised of three zones for real estate and retail development. In terms of air cargo volumes, Muscat International Airport experienced positive growth of 10% in 2015, reaching 134,500 tonnes, up from 122,189 tonnes in 2014. Completion of the new terminal is expected to increase capacity to handle 260,000 tonnes of cargo per year initially, rising to reach 500,000 tonnes later on.

Partnering Up

To prepare for the anticipated growth in airline operations in the coming years, Oman Air and Singapore-based SATS signed a joint venture agreement in 2016 to establish Oman SATS Cargo, now the single source provider of cargo handling services at the existing cargo facility and the new cargo terminal at Muscat International Airport. In addition to securing a quality improvement in services provided to cargo customers, the strategic partnership is aimed at strengthening Oman’s position as a transit hub.

Separately, OAMC signed a strategic contract with Swissport International and an Oman Air-Menzies Aviation joint venture for the provision of ground handling services in all commercial, cargo and military airports across Oman. The decision to have these firms compete with each other in providing ground services to airlines for a period of 10 years, beginning from January 2017, is aimed at enhancing the quality of services provided to airline passengers, while attracting foreign investment, creating new jobs, and introducing new technologies.

Salalah Airport

Launched in June 2015 at a cost of over OR300m ($779m), the fully renovated and modernised Salalah Airport saw a year-on-year increase in international passenger numbers of 16% between January and May 2016, from 361,273 to 419,150. This followed a surge in numbers when the new airport opened in 2015, with 334,370 travellers recorded – an increase of 43% on the 233,403 registered in 2014. Domestic passenger numbers grew by 12.9%, from 608,567 in 2014 to 686,798 in 2015.

The airport’s new passenger terminal building features Oman’s first boarding bridges and has capacity to accommodate 2m passengers per year, with the potential to upgrade to 6m per year in four stages. The capacity upgrades are meant to meet growing tourist demand over the next 20 years, particularly in the summer months when Salalah’s moderate weather attracts thousands of visitors from Oman and abroad. Cargo terminal capacity at Salalah Airport has also been expanded to 100,000 tonnes a year. Freight volumes at the airport were up by 27% in 2015, handing 1583 tonnes against 1231 tonnes in 2014.

Regional Airports

Three regional airports are currently at various stages of construction in Sohar, Ras Al Hadd and Duqm. Phases one and two of construction at Duqm Airport were completed in early 2016, and work was under way on the passenger terminal, the aviation and meteorology complex, as well as the air traffic control tower, according to the Public Authority for Civil Aviation. The work is scheduled for completion in early 2018. Oman Air increased activity on the Muscat-Duqm route to four weekly flights in 2016, and the airport saw a total of 36 aircraft landings and departures in May, transporting 2480 passengers.

The first two stages of construction at Sohar Airport were completed in November 2014, at a cost of OR63m ($163.3m). The facility is designed to serve as a gateway for cargo and courier traffic in northern Oman and an emergency alternative to Muscat Airport for passengers and cargo coming into the sultanate.

Citing profitability concerns over services launched in November 2014, Oman Air announced plans to temporarily suspend operations to Sohar Airport in early June 2016. Oman National Transport Company is operating more than eight daily bus services between Muscat International Airport and Sohar to connect Oman Air passengers with domestic and international flights.