MUSCAT: Muscat-based Oman Air is seeking an over 36% increase in bilateral flying rights from India as it seeks to compete with West Asian rivals to carry more passengers to and from the country, the world’s fastest growing aviation market.
Oman Air, which flies to 11 Indian cities, is competing with three major Gulf airlines—Emirates of Dubai, Etihad Airways PJSC of Abu Dhabi and Qatar Airways of Doha—that collectively operate more international flights out of India than flag carrier Air India Ltd.
In an interview on Friday, Oman Air chief executive officer Paul Gregorowitsch said the airline will knock on the doors of the Indian government in mid-August to request bilateral rights to fly at least 29,000 seats a week from the current 21,147. “India is an important market. Oman Air operates 126 flights a week between Muscat and India. Indian operations are partly profitable barring a few destinations like Goa, which was launched last year,” Gregorowitsch said. Augmenting its flying rights is critical for Oman Air to put compete with West Asian rivals that are flying bigger planes to India.
Gregorowitsch said the airline has no intention of acquiring an equity stake in an Indian airline, but hinted at a strategic partnership for sharing passengers with Indian counterparts. “We have not yet started talking to Indian airlines. We will do that step by step,” he said.
Foreign airlines are allowed to invest up to 49% in local airlines. In 2013, Etihad Airways purchased a 24% stake in Jet Airways (India) Ltd, India’s second largest airline by passengers carried. After this, it has re-routed at least one out of every three international Jet flights through Etihad’s Abu Dhabi hub. The Oman Air CEO admitted that the airline receives a subsidy from the Oman government.
Last year, alarmed by Gulf airlines carving out a large slice of the lucrative India-US air traffic, the three largest US airlines –American Airlines Inc., United Airlines Inc. and Delta Air Lines Inc. — had alleged that Dubai, Abu Dhabi and Qatar collectively lavished subsidies to the tune of $42 billion on the airlines they own, tilting the playing field in their favour.
“It is a fact. We are receiving subsidy from the government. This year we have received $100 million subsidy from the Oman government but we have given $1.1 billion worth of benefit to the economy in terms of creating jobs and bringing tourists to the country. Even in India, Air India is receiving government support. It’s a global phenomenon,” he said. Gregorowitsch said Oman Air will operationally break even by end of 2017. Some 700,000 Indians live in Oman and 2,900 Indian enterprises operate out of that country; 25% of Oman Air’s staff are Indians.
