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Oman Airports reports strong 2011, positive outlook for 2012

Analysis

Despite the impact of the Arab Spring, Oman Airports Management Company (OAMC) has been able to report record passenger numbers at Muscat and Salalah airports during 2011. Combined traffic at the two airports was better than 7 million, up 12.7% from the 6.2 million passengers handled in 2010.

Oman Airports Management Company passenger traffic: 2001 to 2011

Muscat International Airport, the country's major international gateway, handled 6.4 million passengers in 2011, up 12.7% year-on-year. The airport has operations from 30 scheduled carriers with 58 destinations.

Muscat International Airport passenger traffic: 2001 to 2011

Two major factors contributed to the growth at the airport: the ongoing development of Oman Air and the growth in airlines serving the airport.

Oman's state-owned carrier is now well entering the fifth year of a major expansion and redevelopment. The airline has progressively expanded its fleet and network, as well as completely reworking its product, both in the aircraft and on the ground, and expanded its network.

Traffic at the airline increased from 1.2 million in 2007 to 3.3 million in 2010. Full year 2011 traffic at the carrier has not yet been reported, but 1H2011 traffic was up 24% year-on-year, to 1.8 million passengers. More than 90% of Oman Air's traffic goes through Muscat Airport.

During 2011 Oman Air added new services to Milan, Zanzibar and Zurich. A new service to Moscow had been planned for 2011 but has been postponed. The airline increased capacity to Colombo, Cairo, Karachi and Male.

Oman Air passenger traffic: 2001 to 1H2011

Outside of Oman Air, Muscat continues to attract new airlines, with Ethiopian Airlines and IndiGo adding services in 2011. IndiGo launched a four times weekly service from Mumbai, making Muscat its fourth international destination. Ethiopian Airlines launched three times weekly service from Addis Ababa on 28-Dec-2011, making it the third African carrier to serve Oman.

Topping off last year's service additions, Bangladesh's United Airlines added Dhaka-Muscat service on 30-Jan-2011, the first new route for the airport for 2012. The carrier operates three times weekly with A310 equipment. Biman Bangladesh has also announced plans to increase frequency to Muscat to five times weekly and possibly daily.

The addition of services by IndiGo reinforces the position of the Indian sub-Continent as the airport's strongest region for passenger traffic. During 2011, 2.5 million passengers were transported to/from the Indian sub-Continent region via Muscat. Apart from IndiGo, the airport also sees sub-continent traffic from Air India and its low-cost unit, Air India Express, as well as Airblue, Jet Airways, Biman Bangladesh, SriLankan Airlines, Shaheen Air and Pakistan International Airlines.

Indian sub-Continent airlines operating to Muscat

Carrier

Weekly frequencies

Airblue

3

Air India

24

Air India Express

19

Biman Bangladesh

4

IndiGo

4

Jet Airways

21

Pakistan International Airlines

13

Shaheen Air

6

SriLankan Airlines

2

United Airways (BD)

4

Oman Air has extensive operations into the sub-continent region. In India, it operates to 10 destinations, as well as three in Pakistan, and one each in Nepal, Sri Lanka and the Maldives.

The GCC nations make up Muscat Airport's other major market, accounting for approximately 2.2 million passengers in 2011. The UAE is the airport's largest single country market, accounting for around 29% of total weekly seats. The second largest market is India at 24.2% of total seats via services from Oman Air, Emirates, Etihad Airways and Air Arabia.

Muscat International Airport passenger markets by country (% seats per week): 2011

Oman's smaller international airport at Salalah, in the country's south, also experienced relatively strong growth. The airport saw passenger traffic up 12% to 513,000, with notably stronger traffic during the Oman holiday periods and relatively strong pilgrimage traffic. Outside of Oman Air, the only other scheduled carrier at the airport is Air India Express, which has operations to Kochi and Trivandrum.

With increasing premium passenger levels thanks to Oman Air's improved service standards, new first and premium lounges at the airport have been added. Other detail improvements were completed, including increased car parking capacity, new aerobridges and other passenger service enhancements. A new surface movement system has also been selected for Muscat and Salalah and other development projects have been embarked upon.

Most significantly, OAMC awarded the long awaited contract for the development of the new terminal at Muscat Airport in early 2011. The contract was awarded to a consortium compromised of Bechtel, Enka and Bahwan Contracting. Work on the USD1.8 billion project began near the end 2011, although labour issues have already cropped up for the project. If everything stays to schedule, the terminal is projected to be completed in 1H2014, with operations to begin later in the year.

With passenger traffic expected to keep increasing, the new terminal will raise capacity to 12 million passengers p/a, enough to handle traffic out to 2017/18 given the growth seen at Muscat over the past few years. Later stages of the development will see capacity jump by another 12 million annual passengers per stage, to an ultimate capacity of 48 million passengers p/a by 2050.

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