Will successfully deal with financial challenges, says Oman Air CEO
Date
9/28/2016 7:14:06 AM
(MENAFN- Muscat Daily) Muscat-
Paul Gregorowitsch, CEO, Oman Air has said that the airline is confident it can deal with the increased financial pressures in the current economic scenario.
Gregorowitsch predicted a challenging 2017 at an update of the airline on Tuesday, but said the company is still hopeful it will meet its long-held target to break even that year. Government subsidies have been gradually declining over the years, and officials said the airline is already preparing to borrow from banks to meet expenditures. Gregorowitsch said Oman Air was approaching banks for finances 'just like any company'. 'It is foreseen that for 2017, the government contribution will probably be zero. It will be a highly challenging year,' Gregorowitsch said. 'However I stay committed to the target to achieve an operational break even.' Abdulrahman al Busaidy, deputy CEO said Oman Air's revenue increased by seven per cent in 2016, and overall passenger traffic rose by 26 per cent. But revenue from government and business travel within Oman has decreased by 27 per cent. Officials said ticket prices have gone down in 2016 as a result of increased airplane capacity in the region. '[There is] overcapacity in the markets, a highly challenging revenue budget, however, costs are under control,' Gregorowitsch said. Gregorowitsch said Oman Air's contribution to GDP is still above RO400mn. The company's Omanisation rate is 64 per cent. Oman Air also has an agreement with the Ministry of Manpower to reach 70 per cent Omanisation by 2020. New routes Oman Air officials also announced new routes to Guangzhou, China this December, and to Manchester, UK, in the summer of 2017. They said future routes are planned for South Korea, Vietnam and South Africa. A new route to Kiev, Ukraine, which was scheduled to start in 2016 has been put on hold due to the political situation there. Similarly, flights to Najaf which were to have started this month have been delayed due to security concerns. Officials announced the opening this month of a new flight simulation centre for Boeing 737s and Airbus A330s, which allows those pilots to train and renew their licences within the country. They also announced new catering menus across seat classes. Oman Air will be broadcasting a television advertisement about its services and tourism in Oman on CNN this month. Two runways a must As the new Muscat International Airport is set to open, Paul Gregorowitsch has called on the authorities to reconsider the adoption of a second runway. As of now the new airport will have only one runway, which Gregorowitsch said was holding airlines back. Due to lack of space, airplanes have to delay their landing and take-offs for up to ten minutes, officials said. Additionally, at certain times in the morning, planes cannot land because of necessary maintenance on the sole runway. This was causing an extra financial burden, officials said. 'It should not be that we have one runway with a new terminal like we have today. Today, you have to halt your aircraft, because it can't even cater for the existing terminal,' Gregorowitsch said. 'To have a second runaway is extremely important for growth and for economic success, he added.