Oman Air gets another capital injection; but it contributes a billion dollars to Oman's economy

Oman's investment in creating a national carrier continues to be a costly one. Oman Air has reported that losses for 2013 increased 16%, to OMR113.34 million (USD294.1 million).

Following on from the losses of OMR97.5 million (USD253.2 million) in 2012 and OMR109.9 million (USD285.4 million), the latest rush of red ink has forced the Sultanate of Oman to bail out the airline again, this time via an OMR200 million (USD519.5 million) capital injection. The government justifies the investment on the grounds of the wider economic benefits the airline brings. But this seems so be leading to substantial staff cost blowouts (up 36% in the three years to Mar-2013)v, always a risk when the bottom line is underwritten.

During 2013, Oman Air's revenues increased 10% year-on-year, to approximately OMR382 million (USD992 million). Traffic expanded 13%, to a little under 5 million passengers. The carrier launched new services between Salalah and Jeddah, and between Muscat and Madinah, as well as increasing frequencies from Salalah. ASKs rose 11.2% to 14.9 billion.