The new airline would be established for both international and domestic services. The last date to collect the RFI document is May 21, while the Expression of Interest should be submitted by June 25. While the travelling community has welcomed the move as more competition means more competitive prices, the experts have, however, have mixed views on the subject, with some looking for more clarity once the details of the tender are known today.To counter the argument whether there is a room for a second airline, Alpen Capital in its report predicted that between 2012 and 2032, air passenger traffic in the Middle East, in terms of Revenue Passenger Kilometers (RPK), was expected to expand at a compounded annual growth rate (CAGR) of 6.7 per cent.
Air passenger traffic on outbound routes from the Middle East is expected to outpace that on traditional EU and US routes and within the Middle East, air passenger traffic in the UAE, Saudi Arabia, and Oman is expected to grow at a 6.6 per cent, 6.9 per cent, and 7.5 per cent CAGR, respectively, between 2012 and 2017.
Speaking to the Observer recently, Paul Gregorowitsch, CEO, Oman Air, said that the national airline is prepared to face any competition. “Already we are facing stiff competition from our hub in Muscat as 60 per cent of the market share is with other foreign airlines.” Gregorowitsch was apprehensive over the sustainability of a low cost airline in the country. “People should not over-estimate that the new airline will be low priced or low cost. It has to operate in a similar environment like that of a full-fledged airline, with regards to airport charges and staff wages, among others,” he said.
Riyaz Kuttery, General Manager, Jet Airways, Oman, said that a healthy completion is always welcome, but added it will be interesting to know more about the sharing of bilateral rights and seats.
“The aviation scene has changed a lot since Jet Airways started operations from Oman. Today, more low-cost airlines are operating out of Muscat and healthy competition . He added that as Jet Airways has only got stronger following its partnership with Etihad Airways, the competition will not affect the airline’s business,” he said.
John Jacob, General Manager, Kingdom Travel and Tourism, said that a new airline will bring give more options to passengers and it should be welcomed. A travel operator said, “The new Muscat International Airport will help bring more transit passengers to Oman and the fact that Oman Air is also expanding rapidly, the two national airlines may be able to complement each other in the future to meet the growing passenger traffic.”
P Rajeev, Managing Director, Oman Orient Travels and Tours, said that the as a seller of airline tickets he welcomes the decision and said the low-cost airlines have their own model to do business and generate revenues. “This will be big boon for passengers, especially during the holiday seasons,” he said. The low-cost model in the Gulf got a boost with the emergence of Air Arabia in 2005. Now in its eleventh year, the airline operates flights to 101 destinations from its main base at Sharjah. The carrier also serves from five international hubs, including Sharjah and Ras al Khaimah, Morocco, Egypt and Amman.
Flydubai, which started operations only in 2009, is one of the leading budget airlines in the region, despite completion from other established competitors.
It may be also noted that the airports in the region are also getting bigger with the Muscat International Airport, expected to be ready in 2016, will handle around 12 million passengers annually, more than double from its current strength. New Salalah airport is expected to be ready for full operations in the coming months while the airports in Duqm and Sohar are expected to be ready in the next two years. Nearly 2.41 million people used the Muscat International Airport for international or domestic travel in the first quarter of this year, registering a year-on-year growth of 8.9 per cent in passenger traffic.
http://omanobserver.om/oman-invites-bids-for-a-new-commercial-airline/
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