Taking off: Aviation capacity is set for expansion in line with development plans

The sultanate’s development plans include a much-expanded role for air transport, with the aviation sector expected to see increased investment in the years ahead. This upgrade should also transform the entire pattern of logistics in the country, while stimulating regional development and trade. The national carrier is also set to see growth. “The national carrier can be a huge driver for growth in Oman and having fifty planes in operation is our target for 2017,” Wayne Pearce, CEO of Oman Air, told OBG. “The airline has seen tremendous gains of about 30% for passenger volumes, and the same for cargo transport. The potential is there to take this to a much higher level.”

Greenfields & Brownfields

Under its long-term development plan, Vision 2020, and under the recent 8th Five Year Development Plan (8FYDP), which spans the 2011-15 period, diversification away from the oil and gas sector is seen as key to Oman’s future growth. Within this strategy, tourism and infrastructure are highlighted as two areas for substantial investment – both by the government and by the private sector.

Six airport projects have continued over the last few years, two involving the expansion and rebuilding of existing airports on the same sites – Muscat International Airport (MCT) and Salalah Airport (SLL)– and four new regional airports on greenfield sites – Sohar, Adam, Ras al Hadd and Ad Duqm, respectively.

Under the 8FYDP, spending on airport development amounts to OR2.38bn ($6.01bn) planned for the period – the highest allocation of any segment, according to data from the Ministry of National Economy. Some OR1.9bn ($4.81bn) has been allocated to complete ongoing projects at MCT and SLL, with a further OR294m ($743.61m) earmarked to the latter for new projects. In addition, OR183.7m ($464.63m) has been allocated to develop the four regional airports. This amounts to 37.6% of the total allocation of the plan.

MCT

Muscat International, as it has been known since 2008, was opened in 1973 under the name Seeb International Airport on the site of the old Beit Al Falaj airstrip. The current operator of MCT is the government-owned Oman Airports Management Company (OAMC).

The Oman Ministry of Transport and Communications (OMTC), the body that authorised the current airport expansion plan due for completion in 2014, has tendered the project out successfully to a range of international companies, including Turkey’s TAV, Bechtel, Thales, Munich Airport, Raytheon and many others.

Phase 1 of the project involves a new terminal building to allow passenger-handling capacity to rise from 6.48m passengers in 2011 to some 12m by 2014, with future phases set to increase further in the long run.

The number of runways will also double, with the existing strip being extended and a new one added so that MCT will eventually house two 4000- by 60-metre runways, capable of handling the largest jets. A new, 97-metre air traffic control tower is also being added. On the cargo side, the new airport will have a capacity for 260,000 MT per annum, a substantial increase from the 98,780 MT handled in 2011.

While construction continues, the existing airport has also been expanded, as growing passenger and cargo demand drive the OAMC to invest in temporary buildings while it waits for its new airport. According to the OAMC, August 2012 saw passenger arrivals up 18% year-on-year (y-o-y) from 2011, while cargo also grew 14% over the same period. Three new airline operations have also been established, namely IndiGo in October 2011, Ethiopian Airlines in December 2011 and United Airways of Bangladesh in January 2012. Oman Air – the national carrier and main growth driver for the airport historically – also added routes to Zurich in December 2011 and Tehran in September 2012. “The main growth market in source countries in the next 20 years will not come from traditional European markets but from Asia and the Indian sub-continent,” said Vic Allen, CEO of OAMC. “We have one third of the world’s population between a two and six hour flight away.”

SLL

The sultanate’s second airport, in the southern Dhofar region, has long been a tourist gateway to the area as well as a multi-mode transport option supporting Salalah Port, itself the subject of major expansion. SLL began operations in 1977, initially only serving domestic flights from Muscat. As Salalah became more popular though, Oman Air added a Dubai route, and international flights began. While MCT has one inbound season for tourists – the October-April period, when the weather is coolest – yet still warm by European standards – SLL enjoys two inbound seasons, given that Dhofar is touched by the end of the Indian monsoon in June-September. This period, known as Khareef, is also the outbound season for MCT, when Omanis and expats venture south to escape the ferocious summer heat.

The growing awareness of Dhofar’s attractions has brought passenger growth to SLL, with arrivals increasing by 24% in August 2012 y-o-y from the same period in 2011, according to the OAMC. Arrivals for 2011 also rose, to 513,278 from 455,297 in 2010. Cargo remained fairly constant, however, elevating from 1283 MT to 1366 MT over the same period. The new terminal under construction will expand passenger capacity to 1m per year by 2014, with this expandable to 2m, 4m, and 6m in decades ahead. The existing runway will become a taxiway, with a new runway of 4000 metres by 60 metres built to handle larger aircraft. Cargo terminal capacity will increase to 100,000 MT per annum.

The principal consultant for the airport expansion is Copenhagen Airports, in conjunction with Denmark’s Larsen Architects. Other international companies that have been awarded contracts include Thales, Indra, Vanderlande and Munich Airport. The main project management consultants are Aeroports de Paris (ADPI), just as for the new MCT airport. In September 2012 the OMTC declared that 65% of the MCT project had been completed, as had 45% of the SLL development.

Regional Rise

The locations of four new regional airports have been selected according to economic development potential. Ad Duqm, or Duqm Jaaluni Airport (JNJ), in the centre of the country, is being upgraded in conjunction with the development of the seaport at Duqm, which has a focus on the oil industry and will see a major new dry dock built (see ports analysis). While the focus will initially be largely on cargo and business travel, the airport is also hoped to spur the development of tourism in the central regions. The terminal will eventually have a capacity of 500,000 passengers per annum, a single 4000-metre by 60-metre runway, and cargo capacity of 50,000 MT per annum. ADPI is the project manager, with contracts so far awarded to Thales, Indra, Parsons International and Desert Line, amongst others. The completion date is set for 2014.

Sohar airport is being developed in line with the Sohar Special Economic Zone and the rapid expansion of Sohar port. The airport is also set for a passenger capacity of 500,000 passengers per year and a new 4000- by 60-metre single runway, with cargo capacity of 50,000 MT per annum. Three packages of contracts are available, with Strabag Oman having won the first two and the third undecided at the time of press.

The third new airport at Ras Al Hadd is nearby to Sur in the Al Sharqiyah region south-east of Muscat. This is development is expected to promote tourism growth substantially, with ecotourism a particular draw. The new terminal will have the same passenger and runway capacity as the previous two, although it will lack cargo capacity, given its essential, high-end tourism role.

Adam airport is the smallest of the four, and lies in the northern interior. It partly opened in 2010, with full operations expected in 2014. Its focus is tourism, with the new terminal capable of handling 250,000 passengers per year. Strabag Oman has the civil works and runway construction contracts, with Indra and Thales the air traffic management and navigational aid work.

As of September 2012, according to the OAMC, work on the regional airports was progressing in three phases. The first civil works phase was largely complete, while the second phase – aircraft stands and runways – was at around 50%. The third phase – the terminal buildings – was still in design stage. Nonetheless, 2014 remains the official target for completion, although there is potential for an extension period if required.