Story ID: 999 OAG
Oman Launches 'National Aviation Strategy 2030'
By: Peter Shaw-Smith
Caption: OAG planning sixfold increase in aviation's contribution to GDP by end of decade
Word Count: 637
Oman’s Transport Ministry seeks to spur a sixfold increase in aviation’s contribution to GDP in the next decade, aiming to boost the figure from OMR159 million ($61 million) in 2018 to OMR890 in 2030, as forecasts also show a planned doubling of passengers using Oman’s airports, to 40 million a year, and air cargo quadrupling to 730 million tons, as announced in Oman’s new "National Aviation Strategy 2030."

“The National Aviation Strategy will revolutionize our sector in Oman by bringing forward new projects at every point in the aviation lifecycle,” Oman Aviation Group CEO Mustafa Al Hinai told AIN. Initiatives include restructuring Oman Air to become a "destination business model airline," creating a master plan for Muscat Airport City meant to promote investment, job creation, and support SMEs, and establishing the so-called National Travel Operator, which would offer a tool to sell local travel services to international markets. 

Oman expects to expand its passenger and cargo markets at a faster pace than in the wider global aviation sector. The Middle East and its neighboring regions (China, India, and Africa) now stand among the fastest-growing aviation markets in the world, the document said.

“[Gulf Cooperation Council] air traffic is expected to continue to grow with a projected CAGR of 5 to 6 percent, placing it among the fastest-growing aviation markets in the world, leading up to 2037. To support this rapid and sustained growth, the Middle East must ensure that its infrastructure, human capital, and services are capable of meeting increased demand,” said the report.

The report noted that air cargo growth over the next two decades in the Middle East would exceed that of any other part of the world; as measured by freight-tonne kilometers bound for the region, projections show an annual growth rate of 5.9 percent, compared with 5.5 percent in Asia-Pacific, based on Airbus’s 2017-2037 Global Market Forecast.

It also noted the GCC's ideal location for capturing freight flows from Western countries and the Asia-Pacific region. Asia-related volumes represent some 50 percent of global air trade, while Europe represents the Middle East’s biggest air trade partner with 32 percent of total tonnes traded.

Challenges facing the region include tightened demand through a fall in oil prices and currency depreciation against the U.S. dollar in key markets; intensifying competition involving potential price wars with U.S. and EU carriers, as well as pricing pressure from emerging LCCs; political uncertainty with militant attacks in several countries and travel bans in other countries; and travel restrictions, including a recent U.S. and UK electronics ban, and increased U.S. security measures for Muslim nations.

The government plays a major role in Oman’s aviation sector. In addition to the Public Authority for Civil Aviation, Oman Airports, Oman Air and LCC Salam Air, and Oman Aviation Hospitality all contribute to the sector. Oman Aviation Group, established in 2018, will take planning responsibility for overall sector development.

Oman Air’s fleet consists of 55 aircraft (three Boeing 787-8, seven 787-9 Dreamliners, six Airbus 330-300s, four Airbus 330-200s, five Boeing 737-900s, 21 Boeing 737-800, four Embraer 175s, and five Boeing 737 Maxes currently grounded due to a worldwide airworthiness directive).

“[W]herever considered appropriate, private sector involvement may be enabled if this would further support the Omani aviation sector’s development by increasing its competitiveness while creating job opportunities, as well as know-how and capabilities for the Omani workforce and businesses,” according to the report.

“The targets we’ve set are of course ambitious, [b]ut the region is well placed for logistics growth,” Al Hinai concluded. “And with IATA predicting there will be 500 million passengers flying to, from, or within the Middle East by 2037, the opportunity for Oman as a standout destination is clear.”