Oman’s SalamAir flies Pakistan’s skies, eyeing opportunities arising from CPEC

BE2C2 Report — The Sultanate of Oman’s SalamAir is the latest entrant to venture into Pakistani skies since the announcement of the National Aviation Policy (NAP) 2015 – whereby the government liberalized the air market to encourage foreign airline participation, particularly from the Middle East.

Launched in January 2017, the Omani budget airline currently flies daily from Muscat to Dubai and Jeddah and thrice a week to Karachi, Madinah and Sialkot.

However, with the future of Pakistan’s air and travel industry appearing promising, the airline announced it will extend and expand its services in the country.

The airline’s objective says Mohsin Al-Balushi, Commercial Director of SalamAir, is to bridge the demand gap for quality and affordable flights by business, leisure and religious travelers on short-haul routes to and from Oman. SalamAir will open up travel for Omanis keen to explore the opportunities arising from CPEC projects, report Aurora.

According to an estimate based on current economic and demographic growth, the International Air Transport Association (IATA) has projected that intra-Pakistan air traffic will grow at almost 10% over the next 20 years; more than twice the 4.1% projected annual world growth rate (source: JCR-VIS Pakistan Aviation Industry Report 2016).

In Pakistan, the airline began operations from Sialkot and according to  Al-Balushi, “this is a very exciting time for aviation in Pakistan; especially after the NAP 2015 announcement that laid the groundwork for the industry to capitalize on the China-Pakistan Economic Corridor (CPEC) and attract new investment into the sector.”

Also read: Aviation sector strategic dimension of China Pakistan Economic Corridor, PAF to lead

Terming CPEC as a “corridor of tremendous opportunities”, Al-Balushi says it will be a catalyst for future business and economic activity and will generate thousands of jobs across Pakistan. It will also open up an era of unprecedented growth for both domestic and international air cargo and passenger traffic. Moreover, the flights will also serve the needs of the Sultanate’s Pakistani community, which is currently over 220,000.

Elaborating on aviation prospects in Pakistan, Al-Balushi quotes the World Bank’s forecast whereby Pakistan will experience a growth rate of 5.5% by 2018. Pakistan has also been classified as the world’s fifth fastest growing economy. Given these projections, he believes more affordable airlines will be keen to follow SalamAir’s lead and will begin services in Pakistan as well.

The Aviation sector has been recognized by Pakistani thought-leaders as one of the become strategic dimensions of the China Pakistan Economic Corridor, and the Pakistan Air Force will PAF lead, says a report.

Furthermore, the launch of SalamAir will enable Pakistan’s business community to capitalize on Oman’s investor-friendly regulatory framework and the many options its economy offers including tourism, manufacturing, fisheries, mining and logistics, said Al-Balushi.

Oman recently announced tourist and business visa on arrival for several nationalities including Pakistanis and lowered minimum salary threshold for expats in Oman to encourage their dependents and extended families to visit the Sultanate.

SalamAir’s flights in Karachi began in June and the third target city is Multan which according to Al-Balushi, is under discussions. “Although we were given the slot approval for Multan months ago, we are still waiting for landing permission.” The airline is also working on expansion to new destinations and these will be announced shortly.

Keeping in mind the competition from multiple international airlines, SalamAir aims to grab market share through a competitive price structure.

A one-way trip from Karachi to Muscat via SalamAir is priced between Rs 8,000 and 9,400. In comparison, the same flight on Etihad Airways costs Rs 24,000, on Fly Dubai and Air Arabia Rs 19,000, on Emirates Rs 23,000 and on Oman Air Rs 25,000 respectively.

In terms of local airlines, only PIA (market share 51% as of FY15) and Airblue (market share 13%) fly to Muscat. The former charges between Rs 23,000 and 26,000 (from any city to Muscat) while Airblue offers only Lahore to Muscat flights for Rs 22,000.

Based on the above, Al-Balushi said, “We have opened up the skies to passengers who were previously inhibited from flying because of the cost, while enabling others to fly more frequently.”

As more international flights touch local runways, Pakistan’s airports are expected to earn huge revenues and passengers will benefit from more choice, better services and competitive prices and discounts. Al-Balushi ends with a word of caution: “However, I hope the airport infrastructure improvements to sustain this growth will remain a priority for the government of Pakistan.”

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