Omani A320 Pioneer Makes Mark as Emerging LCC

Omani LCC SalamAir expects to more than double its fleet to nine A320s by year’s end, as it adds new international routes and responds to thriving demand with load factors of over 85 percent in 2019, the airline's CEO, Capt. Mohamed Ahmed, told AIN in an interview at Dubai’s Airport Show on April 29.

Beginning daily operations in 2017, SalamAir operates three Airbus A320s and one A320neo, making it the first Omani carrier to use the single-aisle aircraft. “We are going to see five more A320neos this year,” he said. “[As launch customer in the Gulf, Kuwait’s] Al Jazeera got their first A320neo just before us. We got it last December.”

SalamAir's expanding route network covers 20 destinations including the recently launched Kuwait, Riyadh, Tehran, Trabzon, and Istanbul, in addition to direct flights between Salalah and Abu Dhabi. The airline flies to three domestic airports—Muscat, Sohar, and Salalah—and domestic flights account for some 30 percent of its capacity. “As we grow, we will be expanding more into international routes,” said Ahmed. “We were the first airline to start the route between Sohar and Salalah, and it was extremely successful. These flights started in summer 2017. Of course, during the Kharif (the monsoon on Oman’s south coast that brings much lower summer temperatures than in the rest of the Gulf region), it's a very successful route. Last year we allocated two flights a day and we had extremely high load factors.”

During the rest of the year, demand drops, leading to a weekend product on the route. “We've worked very hard with the airport authorities and are very thankful that they extended [our scope], because we used to have daylight operations only,” he said. “During the winter, that meant [many] restrictions. They've just approved night flights as well. So I think Sohar has a lot of potential going forward.”

Flights to Duqm, serving the new port and industrial zone megaproject run by the Special Economic Zone Authority Duqm (SEZAD), represent another target for SalamAir. “Two weeks ago, I was with the authority, giving them some options for flying there. At the moment, maybe the traffic flow between Muscat and Duqm is not that high and there is already one carrier [Oman Air] operating. But as more projects come online in the coming months and years, I think there will be a room for more flights.”

The Muscat National Development and Investment Company (ASAAS), which won a tender in January 2016 launched by the Public Authority for Civil Aviation (PACA) for the creation of an Omani LCC, owns SalamAir. Established in 2014, ASAAS is a partnership between Omani sovereign wealth fund, the State General Reserve Fund, Muscat Municipality, and a number of pension funds. Total government shares in SalamAir stand at 30 percent; Omani private investors own the other 70 percent.

As a seasoned pilot, Ahmed flies the airline’s A320. “I do not fly as much as I want, because I'm occupied in the office most of the time,” he said. “It's usually once a month. I am from Bahrain. Previously, I was part of the startup team of UAE-based LCC Air Arabia.”

Ahmed sees good potential for LCCs in Oman and across the Gulf Cooperation Council. “If you look elsewhere in the world, LCCs have penetrated the market to a much higher level,” he said. “This is the opportunity we have. When we do our business cases, we see the potential of where we can go. Of course, people hear about a lot of startups, but what they don't hear about is how many LCCs actually shut down. The airline business is not about starting up, but making it sustainable for it to continue profitably.”

During SalamAir’s existence over the past two years, it managed to carry 1.7 million passengers. In the first four months of this year, it has seen a composite load factor of more than 85 percent. “This is very encouraging for the whole team to continue and grow in a sensible way to reach profitability,” Ahmed concluded.