By A Staff Reporter — MUSCAT — National carrier Oman Air’s revenues jumped 35 per cent to RO 311.3 million in 2011, driven by strong growth in both passenger and cargo revenues. However, losses during the year amounted to RO 110 million attributable primarily to the soaring cost of fuel, the airline revealed in its 2011 annual report issued here yesterday.
In a statement, Oman Air said the Annual Report reflects the accomplishments achieved by the company, in addition to the outstanding efforts and the successful approach towards the development of all aspects of its operations in order to continue the company’s growth and successes. Oman Air’s business operations have witnessed remarkable growth during 2011, it said.
Reviewing the annual report on behalf of the Board of Directors of Oman Air during the Extraordinary General Meeting and the 30th Ordinary General Meeting in Muscat, Darwish bin Ismaeel al Balushi, Minister Responsible for Financial Affairs, Chairman of Oman Air’s Board of Directors, highlighted some of the achievements of 2011.
They include a 35 per cent increase in revenue, a 16 per cent jump (3.8 million) in passenger volumes, 73 per cent increase in the seat factor, 28 per cent rise in freight revenues, the acquisition of two E-175 regional jet aircraft, the signing of a codeshare agreement with British Midland International, and the addition of two new destinations to its network.
Al Balushi said: “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,” Al Balushi added.
“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.” The results speak for themselves, Al Balushi said. The number of passengers carried by Oman Air increased by 16 per cent in 2011, against a global increase in demand of just 5.9 per cent, and despite our 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.”
Oman Air’s move towards long-term profitability continued apace in 2011, the Minister said. “While the company has reported a loss of RO 110 million during the year, it is important to note that the results for the year were impacted by 38 per cent increase in fuel price which alone increased the expenditure by RO 37 million. 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. The airline reported improved yields and seat factors despite higher capacity.”
Revenues increased by 35 per cent to RO 311.3 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, Al Balushi said.
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 RO 8 million. Total manpower cost in 2011 was RO 87.3 million.
Al Balushi mentioned that the development of human resources has always been a priority for the Board of Directors 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.”
