RIYADH: In order to address its debt issue, Oman Air has approved a restructuring program to reduce its losses by 15 percent during the current fiscal year while aiming to reach a break-even point by 2026.
In a press conference, Oman’s Minister of Transport, Communications, and Information Technology Saeed bin Hamoud Al-Maawali announced that the airline’s board of directors has approved a comprehensive program to restructure the national carrier based on a specialized study.
In a financial statement issued in May, the airline made a forecast of reducing its net loss by a further 56 percent in 2023, compared to a reduction of 35 percent in 2022.
It hopes to increase its total revenues by 236 percent this year compared to 2020.
The program, which will be implemented over the next three to four years, aims to address ongoing losses and the accumulation of debt.
Al-Maawali, who is also the chairman of Oman Air, stated that the program has four primary pillars: Financial sustainability, corporate governance, commercial factors, and human capital.
The restructuring includes changes in senior and middle management, cost-cutting, increasing the quantity and quality of financial return, and limiting debt and other financial commitments.
The program was recommended by Oliver Wyman, an international management consulting firm, which conducted a detailed assessment of the airline’s financial and commercial performance.
As part of the restructuring, the airline will re-evaluate its existing network to decide whether to continue with certain destinations or not while considering integration with Salam Air.
The consultant has also proposed measures to ensure long-term commercial operations. The airline’s restructuring also seeks to improve its core operating performance and improve market demands.
In order to achieve a radical and sustainable transformation of the airline, the minister stated that they will look at onboarding highly qualified specialists, who would be both domestic and foreign experts.
Al-Maawali expects Oman Air to reduce its losses by 15 percent during the current year, with performance to improve further in the next year in light of the rising demand witnessed in the regional aviation sector.
In June, Oman Air was designated “Best Airline Staff in the Middle East” at the Skytrax 2023 World Airline Awards.
