Aviation in Oman
Aviation and related industries in Oman have grown steadily over the past few years. With a robust aviation investment program currently underway, the growth outlook remains positive. Current aviation investment projects include major terminal developments underway at Muscat and Salalah International Airports, as well as completion of four new regional airports.
The government of Oman is currently investing in six new airports. That is a huge project, and we understand it is one of the biggest projects ever been undertaken in Oman. It is a very exciting time. It coincides with a period of rapid growth in transport, both in terms of airlines coming to Oman and passengers, and also a huge growth in Oman Air as the national carrier. It is a very exciting time and we are looking forward to new airports coming on stream in two or three years time to support their growth.
There is tremendous growth going on in Oman in civil aviation. The government is developing a series of new airports and investing very considerably in the national airport in Muscat where there is a massive new terminal being built by the second runway. I think both of these will be wonderful for the development of the infrastructure of the country. This will also enable growth in business and the general development of the nation.
These developments will speed the already upward-trending growth of related markets in Oman. According to the World Travel & Tourism Council, the tourism industry currently represents about 7% of Oman’s total GDP, or 5.3 billion dollars. This figure is predicted to grow by 5.5% per year, surpassing 9.7 billion dollars by 2023.
Travel & tourism sector investment activity is also expected to rise, from less than 1 billion dollars, or 5.2% of total investment in 2013, to over 1.9 billion dollars, or 6.5% of total investment, by 2023. The growth of the aviation sector will be one of the main drivers of overall travel and tourism growth, and Oman's government has budgeted significant resources for aviation under the 8th five-year plan.
Expected to cost 6.1 billion dollars over five years, aviation investment projects represent the largest part of the country’s budgeted capital investments, totaling nearly 40% of all spending in the 8th five-year plan. While 8% of the funds are earmarked for the completion of the 4 regional airports, 92% is going towards the country’s 2 primary airports in Muscat and Salalah.
Muscat International Airport
The new terminal at Muscat International Airport, which services destinations in Europe, Asia, Africa, and throughout the Middle East, is by far the most significant of the projects under development. In 2003, traffic through Muscat International stood at roughly 2.8 million passengers per year. Since then, traffic at the airport has grown significantly and pushed the current terminal beyond its capacity.
We currently have 8m passengers per annum in Muscat airport, which is the gateway airport through Oman. The growth has been averaging 16% through some years now. We expect that to continue into the future, and maybe even grow stronger than that when the new airport comes on stream. The new airport is designed for 12m passengers, but it is easily extendable to 24, 36, and even 48m ultimately. There is no shortage of capacity planned, and we know we are confident that will support aviation growth for many years to come.
Similarly, Salalah Airport has seen significant increases in annual traffic over the past ten years, up from about 200,000 in 2003, to an expected 700,000 in 2013. With a new terminal and air traffic control facilities, the airport will be well-equipped to service the needs of a new wave of international tourists and business travelers.
One of the most interesting things recently is how people have become aware of Salalah. We have started to get other carriers to fly into Salalah, as well as what we do ourselves. Between Muscat and Salalah in 2013, we will carry 500,000 people. A lot of those are Omanis, but we are seeing a tremendous increase in interests from places like the United Kingdom, France, and Germany. I feel in 10 years time Salalah will almost be looked upon as the Maldives of the Gulf. It has a huge tourist potential.
Making Oman’s flight capabilities even more robust will be the four new regional airports in Sohar, Al Duqm, Ras al Hadd, and Adam. Combined, they will add the capacity to handle almost 2 million passengers each year. Sohar will enable multimodal transport; Al Duqm will boost industrial shipping activities on the coast; Ras al Hadd will usher in eco-tourism to its area; and Adam will service the interior of the country. These developments in the aviation sector create a wealth of opportunities for businesses in a variety of industries.
Outlook for Aviation in Oman
The government has recently made an announcement about opening up the aviation sector to more private sector involvement, and it is a very timely initiative. With the new airports under construction, it will be a huge opportunity for private sector development or PPP type development, or joint venture type development. There are a large range of secondary industries supporting the airport. For example, logistics, warehousing, hotels, support industries for the aviation community here on airport. Historically, those types of industries have not been centered around the airport. There is a huge potential for that, and we are looking forward to providing opportunities for businesses to setup that way in the next few years.
With a greatly expanded airport network, and increased throughput capacity, many industries in Oman are set to receive a tremendous boost in the coming years. Aviation sector investment will pave the way for investors and businesses alike to explore new opportunities throughout the Sultanate.