09 April 2012
Muscat: The number of passengers carried by Oman Air soared by 16 per cent at 3.8 million in 2011, against a global increase in demand of just 5.9 per cent.
However, the airline posted a loss of RO110 million last year as fuel-price increases hit earnings. "The results for the year were impacted by 38 per cent increase in the fuel price which alone increased the expenditure by RO37 million," said the airline in a statement.
The loss would have narrowed in the absence of the "steep increase in fuel price," the statement added.
Oman Air said despite an increased capacity, seat factors increased by 0.5 per cent to 72.7 per cent.
"We also served over half a million more meals than in the previous year, a 13 per cent increase. Being the service provider in Muscat International Airport, Oman Air handled 6.5 million passengers along with 34,555 flights. There was also an increase in the number of Oman Air flights carried out in 2011 bringing it to 17,780 round trips," added the airline statement.
But for this steep increase in fuel price, the loss for the year would have been lower compared to the previous year which is a significant achievement, especially considering the fact that the airline deployed significant increase of 21 per cent in the capacity across the network.
Improved yields
The airline reported improved yields and seat factors despite higher capacity. Oman Air also saw revenues increase by 35 per cent to RO311.3 million, reflecting international recognition of, and demand for, Oman Air's products and services. Both passenger and cargo revenue registered handsome growth over the previous year.
This was at the time when the European crisis impacted traffic from and to Europe.
The company carried out a company-wide compensation study and increased staff salaries to bring the same in line with the industry and offset increase in cost of living. This meant increase in the company's manpower costs by about RO8 million. Total manpower cost in 2011 was RO87.3 million.
"The year 2011 was a year of both change and consolidation for Oman Air. We have continued our programme of rapid expansion, introduced new aircraft and further enhanced the quality of our products and services. We have also invested in training, agreed a number of partnerships and joint ventures and taken a series of measures to improve efficiency.
Each of these steps has been taken with two key aims in mind: to ensure the best possible passenger experience for our customers and to improve profitability in the long run," said Darwish bin Ismail Al Balushi, the Minister Responsible for Financial Affairs and chairman of Oman Air.
Al Balushi added that the development of human resources has always been a priority for the board and the executive management. "The company continues with its initiative towards Omanisation process, within its various departments and activities, including technical and higher management positions."
The losses are part of the growth model for the airline and represent investment by the government to build Oman Air to a size where it would be a profitable entity. Oman Air with its capacity increase contributes significantly to the non-oil economic growth and tourism. The government of Oman therefore would continue to support the expansion strategy for Oman Air.
Muscat: The number of passengers carried by Oman Air soared by 16 per cent at 3.8 million in 2011, against a global increase in demand of just 5.9 per cent.
However, the airline posted a loss of RO110 million last year as fuel-price increases hit earnings. "The results for the year were impacted by 38 per cent increase in the fuel price which alone increased the expenditure by RO37 million," said the airline in a statement.
The loss would have narrowed in the absence of the "steep increase in fuel price," the statement added.
Oman Air said despite an increased capacity, seat factors increased by 0.5 per cent to 72.7 per cent.
"We also served over half a million more meals than in the previous year, a 13 per cent increase. Being the service provider in Muscat International Airport, Oman Air handled 6.5 million passengers along with 34,555 flights. There was also an increase in the number of Oman Air flights carried out in 2011 bringing it to 17,780 round trips," added the airline statement.
But for this steep increase in fuel price, the loss for the year would have been lower compared to the previous year which is a significant achievement, especially considering the fact that the airline deployed significant increase of 21 per cent in the capacity across the network.
Improved yields
The airline reported improved yields and seat factors despite higher capacity. Oman Air also saw revenues increase by 35 per cent to RO311.3 million, reflecting international recognition of, and demand for, Oman Air's products and services. Both passenger and cargo revenue registered handsome growth over the previous year.
This was at the time when the European crisis impacted traffic from and to Europe.
The company carried out a company-wide compensation study and increased staff salaries to bring the same in line with the industry and offset increase in cost of living. This meant increase in the company's manpower costs by about RO8 million. Total manpower cost in 2011 was RO87.3 million.
"The year 2011 was a year of both change and consolidation for Oman Air. We have continued our programme of rapid expansion, introduced new aircraft and further enhanced the quality of our products and services. We have also invested in training, agreed a number of partnerships and joint ventures and taken a series of measures to improve efficiency.
Each of these steps has been taken with two key aims in mind: to ensure the best possible passenger experience for our customers and to improve profitability in the long run," said Darwish bin Ismail Al Balushi, the Minister Responsible for Financial Affairs and chairman of Oman Air.
Al Balushi added that the development of human resources has always been a priority for the board and the executive management. "The company continues with its initiative towards Omanisation process, within its various departments and activities, including technical and higher management positions."
The losses are part of the growth model for the airline and represent investment by the government to build Oman Air to a size where it would be a profitable entity. Oman Air with its capacity increase contributes significantly to the non-oil economic growth and tourism. The government of Oman therefore would continue to support the expansion strategy for Oman Air.
© Times of Oman 2012
