Oman Air posts $286m loss on higher fuel costs
Muscat, April 9, 2012
National carrier Oman Air registered a loss of RO110 million ($286 million) in 2011 on higher fuel costs and other expenses despite a 35 per cent jump in its revenues which hit $809 million.
Oman Air said its move towards long-term profitability continued apace, but the results were impacted by 38 per cent increase in fuel price which alone increased the expenditure by $93 million.
But for this steep increase in fuel price, the 2011 loss would have been lower compared with 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 said in a statement.
Commenting on the results, chairman Darwish bin Ismail Al Balushi said, '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 for Oman. The capacity expansion has also created jobs and more importantly learning and employment opportunities for pilots, engineers and airport operations,' he stated.
'The company continues with its initiative towards the Omanisation process within its various departments and activities, including technical and higher management positions,' Al Balushi said.
According to him, the Omani carrier reported improved yields and seat factors despite higher capacity.
'Last year was one of both change and consolidation for Oman Air,' said the airline chief.
The company carried out a company-wide compensation study and increased staff salaries to bring it in line with the industry and offset increase in cost of living.
'We have continued our programme of rapid expansion, introduced new aircraft and further enhanced the quality of our products and services,' Al Balushi said.
'We have also invested in training, agreed a number of partnerships and joint ventures and taken a series of measures to improve efficiency,' he added.-TradeArabia News Service