The Sultanate of Oman has announced plans to move forward with the creation of a low-cost budget airline. According to a report in the Times of Oman, the Public Authority for Civil Aviation has invited companies within the sultanate to put forward proposals to create a second operator. Currently, Oman Air is the country's only air carrier.
After proposals are reviewed, a new operator will be established to create the budget service. The research into creating the budget carrier began in November.
"We are conducting a study to introduce a new airline, like [a] budget airline," said Ahmed bin Mohammed bin Salim Al Futaisi, minister of transport and communications, according to Times of Oman .
Residents of Oman have already hailed the move by the government, expressing their eagerness for the new initiative. Not only will the budget airline provide a lower cost alternative but it will also likely work to boost the economy, specifically in the tourism sector.
Passenger traffic at the Muscat International Airport has seen a nearly 9 percent increase in the first quarter of this year compared with the same period last year. The Salalah airport has seen an even greater increase of more than 12 percent over the same quarter last year.
The aviation market has also performed better over the last few years compared to other regional hubs of a similar size such as Manama, Kuwait City, and Amman. Muscat's airport saw nearly 9 million passengers last year, more than doubling from the 4 million in 2008.
Oman Air has in large part been seen to drive this passenger growth but has seen significant financial losses as a result of its rapid expansion, totaling some $1.3 billion according to the Centre for Aviation . However, the government of Oman sees the airline as a strategic national asset and not a commercial enterprise. For the time being, the government plans to continue to fund the airline's bottom line to keep it flying.
The new budget airline would be privately owned, similar to Air Arabia and Fly Dubai, which are headquartered in the United Arab Emirates. Budget airlines have been expanding within the region, with Air Arabia's expansion to Amman making headlines last week with its inaugural flight to take off later this month.