Oman Air announces $519m capital increase as losses grow

Airline chief also announces plan to spin off ground handling, cargo businesses as 'separate legal entities'
Oman Air announces $519m capital increase as losses grow
By Andy Sambidge
Sun 30 Mar 2014 04:04 PM

Oman Air said on Sunday that it is increasing its share capital by OR200 million ($519 million) as it seeks to reverse losses of OR113 million in 2013.

The airline reported increases in revenues and passenger numbers, supported by growth in seat capacity, cargo operations and the number of passengers carried last year.

Airline chairman Darwish Bin Ismail Al Balushi said in a statement that although losses rose by 16 percent last year it was as a result of investment in new aircraft.

He added that Oman Air intended to spin off its business units such as ground handling, cargo handling, and duty free as "separate legal entities which will enhance efficiencies and effectiveness".

The plan will be begin with the ground handling and cargo handling businesses, he said, adding that timescales will be announced following consultation with the Government of Oman.

"Although Oman Air 's loss increased in 2013 by 16 per cent to OR113.3 million, the company's direct and indirect contribution to the Omani economy over the same period was, according to studies we have commissioned, as much as OR400 million, which more than offsets Oman Air's financial debt to the nation," he said.

He added that the increase in the company's share capital to OR700 million would "further assist" the airline's progress which includes the arrival later in 2014 of the first of 20 new aircraft it has on order.

A statement said revenues increased in 2013 by 10 percent to OR381.7 million while passenger numbers rose by 13 percent to almost five million.

Capacity increased to 14.9 billion available seat kilometres while cargo handling increased by 7 percent to 119,785 tonnes.

Al Balushi added: "Over the course of 2013 we have enhanced our focus on driving up quality standards, delivering greater efficiencies, increasing the range of choices we offer, and preparing the way for our next stage of major expansion.

"The significant 10 percent increase in our revenues and the very positive growth of 13 percent in our passenger numbers demonstrate that demand for Oman Air's award-winning services continues to grow."

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