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Oman’s national carrier considers all-economy service

11-Aug-2011
Oman Air CEO, Peter Hill
Oman Air CEO, Peter Hill

Oman Air CEO Peter Hill has announced that the carrier is considering configuring four to five of its B737s to an all-economy configuration. The aircraft would be operated on routes where there is little demand for premium travel, such as the Indian subcontinent. The carrier confirmed that it is looking at a number of new seating arrangements, and an all-economy configuration is “one of the options”.

Oman Air has spent much of the past three years redeveloping itself as a niche luxury carrier and building a network and fleet to go with its new role as national carrier of the Sultanate of Oman. It has upgraded its seating and service in all cabins, but has devoted particular attention to premium passengers, adding new seats, internet and mobile services, new Business and First class lounges at Muscat International Airport and other features such as complimentary chauffer services and exclusive amenity kits for premium passengers. The carrier recently won the ‘World's Best Business Class Airline Seat’ award at the 2011 World Airline Awards, pipping some of its Gulf rivals.

Switching to an all-economy class service would appear to undermine the premium brand the carrier has been building, but it is an outgrowth of the split nature of the Middle East market. While most of the Gulf carriers offer exceptionally strong premium products linking East and West through their hubs, they are also service high growth, lower yielding traffic into the Indian subcontinent and increasingly Africa and Southeast Asia.

Expatriates, the majority of them itinerant workers, made up 27.4% of Oman’s population as of the end of 2010. This is comparatively low compared to the rest of the GCC, with the exception of Saudi Arabia. In the UAE and Qatar, expatriates make up almost 85% of the populations and an even larger proportion of the workforce. 

The all-economy approach at a full-service Gulf carrier is neither particularly novel nor new. Oman Air’s strategy would mimic a strategic move by Etihad Airways in late 2010, when that carrier converted two of its A320s to single-class configuration with 162 seats, up from 136/140 in its regular, two-class A320s.

At the end of Oct-2010, Etihad launched the all-economy service to Alexandria, Colombo, Damascus, Thiruvananthapuram, Calicut and Peshawar. Eithad stated its all-economy service would allow it to be more competitive product in key point-to-point markets in Asia, the Middle East, North Africa and the Indian subcontinent.

The all-economy service at Etihad is to eventually be rolled out to ten aircraft. Notably, Etihad Airways also reconfigured six B777-300ERs to 10 abreast seating in Economy class, adding 34 seats and leading to a “significant” improvement in cost per ASK. The carrier’s A330-300 fleet also had 28 seats added.

Etihad Airways’ CEO James Hogan also pursued an all-economy strategy when he headed Gulf Air. At Gulf Air, Mr Hogan set up Gulf Traveller in 2003, as part of a three-year turnaround strategy for the carrier. Gulf Traveller operated single-class B767-300ERs into high volume South Asian markets such as India (Mumbai and Thiruvananthapuram), Bangladesh (Dhaka), Pakistan (Islamabad, Karachi, Lahore, Peshawar) and Nepal (Kathmandu), as well as selected destinations in the Middle East, Southeast Asia and Africa.

There has been a trend in the Middle East over the last few years towards increasing seat densities. Air Arabia has increased the number of seats on its single class A320s from 157 to 162. Jazeera Airways is now operating A320s in two configurations: one all-economy with 162 seats and one with a 157-seats in two classes. Nasair launched operations with 167-seat all economy A320s, but has since increased that to 180 seats.


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