Oman said to eye launch of low-cost airline

Up to four investors likely to compete for low cost carrier licence - report

(Photo for illustrative purposes only)

(Photo for illustrative purposes only)

Oman is reportedly keen to set up a new low cost carrier to rival the UAE’s flydubai and Air Arabia and Kuwait’s Jazeera Airways, with up to four investors to compete for the new licence.

The Public Authority for Civil Aviation (PACA) said the licence may be awarded to a local Omani private company or a subsidiary of state-owned carrier Oman Air, PACA chief executive officer Salim Al Aufi told the Times of Oman newspaper.

Al Aufi also said the winning bid 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 was quoted as saying. "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."

Low-cost carriers currently represent around seven percent 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."

In March, Oman Air chairman Darwish bin Ismail Al Balushi said the carrier was planning to launch a low-cost airline. Al Balushi said the government already had given in principle approval and a feasibility study was being conducted. The new airline would likely offer domestic and regional flights, he added.

Oman Air posted a loss of OR97.47m ($253m) in 2012, despite revenues rising 21 percent to OMR347.04m. Passenger demand increased 17 percent during the year to 4.43m passengers, compared a 6 percent rise globally and 15.4 percent rise in the Middle East.

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