Goa has been a surprise success for us, says Oman Air CEO Paul Gregorowitsch

Oman Air started its international services in India soon after the Asian country liberalised its economy in 1991. The airline now operates 126 flights a week between Oman's capital Muscat and various destinations in India. The airline's chief executive officer Paul Gregorowitsch who was recently in Mumbai to celebrate Oman Ai's 23rd anniversary in India, spoke to Shahkar Abidi about the airline's plan to get operational break-even by the end of 2017, for which it eyeing the fast-growing Indian market. Paul's career spans over 30 years in the airline industry and he has worked with key aviation players like KLM, Air France/KLM, Martinair Holland and the Germany-based low-cost carrier Air Berlin.

Q. The Gulf economies are going through difficult times due to slump in oil prices. The oil exporting countries as a consequence have cut down on their expenditure and are apparently diversifying their businesses. In such a scenario, where do you think Oman Air is placed as an airline in terms of expansion and growth?

A. The dynamics have changed in the past over a couple of years due to the fall in fuel prices. Oman, like other countries which are dependent upon oil, is now trying to diversify in several sectors including tourism instead of depending just on oil. New business opportunities are being explored and ventured into. As an airline coming from the region, we expect to reach operational profit by the end of the year 2017 and as a consequence of which we hope to get completely non-subsidised by 2018 and grow further to new heights. Therefore, from where I see, the scope and opportunity for growth are huge.


Q. There have been constant allegations from certain global airlines that the Gulf-based airlines including Oman Air are operating on an unfair advantage with the aid of subsidies from their respective government because of which airlines from other regions are at a disadvantage. How do you defend that?

A. The airlines which are alleging unfair play by us have to first to do an introspection of themselves before pointing fingers at us. These very airlines which are now blaming us for getting the government backing were themselves beneficiary of such help for a very long time. For example, Lufthansa received the German government's help from 1949 to 1990. Similarly, Air France had been getting similar benefits from its national government till 2014. Further, British Airways has also been the beneficiary of its government doling out help. So many of the airlines in the past have been receiving the backing of their government, and therefore, it is very unfair for them to blame us. As I earlier said, we expect to reach an operational profit by 2017 and then get completely non-subsidised by 2018. During the current year, we received $100 million in subsidy from the Oman government. But in return, we have given $1.1 billion worth of benefits by creating jobs and business opportunities. It has also helped in bringing tourism into the country, which has given a push to our economy. So in short, we have given back much value to the economy than what we have taken.

Q. Please continue...
A. As far as open sky policy is concerned, France was not willing to provide us with slots for connecting Oman Air flights to its cities from Muscat, which was primarily for protecting their own airlines from presumed unfair advantage they claim we get in the form of subsidies from our government. This, despite the fact that France government itself had been helping its carrier with subsidies for 70 years. During the talks, we made it adamantly clear that we will not be purchasing from their aircraft manufacturer Airbus anymore. Why should we support the French economy by purchasing it from their companies? The message got through to them clearly and we got clearance for the slot. On the other hand, there were other authorities who have been supportive of the open sky policy. For example, German authorities have been open and transparent with us and did not create any hindrance.

Q. The recent exit of UK from the European Union did create some panic among some countries while it is considered to be good for few others. How do you think will the decision impact your airline?
A. The Brexit was a part of a democratic process and so we duly respect the outcome. From our point of view, it will make the UK less expensive for holiday and studies. At the same time, it will make Oman more expensive for the British travellers. However, overall, the development brings additional responsibility to explore the opportunities that may arise.

Q. With new aviation policy just released in India, how does Oman Air look at the available opportunity in the Indian aviation sector?
A. Indian economy is going great and its aviation market is among the fastest growing. With the new aviation policy being released by the Indian regime, we do not want to exclude ourselves from financial participation in any opportunity offered. We are reading into the details carefully before we can decide to invest in any new opportunities. It's not like we will put a blind cheque on the table, but will invest if we find the opportunity suitable for us. It will all depend on the proposal on offer and what benefits it brings to the table for us. The partnership should be sustainable in the long run.

Q. Your Gulf rivals are a major force in the global aviation market commanding formidable market share. Where do you place Oman Air in that context?
A. Our focus and aim is not to match the other Gulf carriers but instead create and work on our markets within the resources available to us. We want to create Muscat as a traffic hub in the Middle East, supporting the commercial, industrial and tourism sectors. The hubs created by our Gulf rivals like the ones in Dubai, Abu Dhabi are huge but very tiring from the passenger's point of view. One needs to be a gold or silver winner in Olympics to catch your connecting flight. We don't want that kind of hub as we don't deal in millions of passengers. What we want is sustainable growth. At present, we have a fleet consisting four Boeing 787 Dreamliners, six Airbus 330-300s, four Airbus 330-200S, five Boeing 737-900S, 18 Boeing 737-800, one Boeing 737-700 and four Embraer 175s. Four more Boeing Dreamliners will be joining the fleet soon with total fleet expected to be around 70 aircraft by 2020 from 57 currently.

Q. Oman Air's lately entered into the tourist state of Goa. Considering the seasonal nature of the market, how is the airline doing on the sector?
A. Initially, we started the route for its tourism potential, as Goa is a hot favourite among the foreign tourists. However, soon we realised that there is ample scope for tapping other forms of travellers and we are now into it. We found that a lot of members from the Christian community travel on a religious visit to places like Cairo round the year. Similarly, a large number of passengers from Muslim faith travel for Umrah and Haj; many of these are from neighbouring states like Karnataka. This is apart from the travellers who go for visiting their relatives and friends. So, on a positive note, Goa has been a surprise success for us. Further, a lot of Oman and other Gulf nationals visit India for medical tourism, which again is a rising market to the tapped. As the economy of India - the seventh largest in the world - continues to thrive, more and more Indian travellers are exploring the world beyond their borders. Furthermore, India's global diaspora is huge and in Oman they constitute the largest expatriate community.

Q. What are your future plans for expansion in India?
A. The bilateral flying rights with India at present allow us to fly about 21,147 seats a week which we want to increase to at least 29,000 seats by 2018. We will be approaching the Indian government authorities soon on this. There is huge scope for further expansion in the country. Since the launch of our first international services from India beginning 1993 to Trivandrum, we have added 10 other destinations, six of which are served by double daily services. The remaining five destinations each enjoy 10 or 11 frequencies per week. In total, we operate 126 flights per week between the Oman capital of Muscat and the destinations in India. Though we have few new destinations in mind and plans to increase frequencies from some current centres, it would depend on the bilateral rights we get from the government. On the global level, we see the airline operate 70 aircraft by 2020, which will fly to an anticipated 75 destinations across the Middle East, Asia, Africa and Europe.