The Sultanate’s airline plans to sign block space agreements with two or more cargo carriers before the end of this year. This is intended to secure additional capacity for transporting airfreight to/from Oman and on international routes, says Mike Duggan, Head of Cargo, in an exclusive interview with CargoForwarder Global. At the same time, he indicates that any wet lease agreements or the purchase of cargo planes were unlikely in the near future.
“Better to outsource than to insource” is Oman Air Cargo’s current strategy. The airline stopped operating its own cargo aircraft with the sale of the company’s only B737-800 (BCF) in MAY25 due to non-cargo-related financial changes. Since then, the carrier has been utilizing the lower deck cargo capacity of its passenger aircraft, specifically those offered by its long-haul fleet of B787-9 (9 units). His company is currently in talks with airlines from the Far East and the EU, regarding block space agreements, Duggan confirms. Oman Air expects a result as early as Q426. It is aiming for a capacity agreement with at least two airlines: one Asian carrier that transports cargo from there to Muscat, with Europe as the final destination. And a European capacity provider that takes over the shipments in Muscat, to fly them on to their final destinations in the EU.
Cargo complements passenger services
A similar concept had already been tried a decade ago, with Cargolux as a partner. However, this ended when both carriers’ interests diverged in the face of challenging market dynamics.
The cargo business accounts for about 10% of the airline’s revenue, with perishables being its strongest pillar. “We provide an important service by bringing food, beverages, and other consumer goods to Muscat, which are then supplied to local hotels and restaurants.” In this respect, the airline plays a central role in supplying local markets with everyday goods. Duggan adds that this is unlikely to change much: “We don’t just chase tonnage but optimize revenue,” he exclaims.
Transit traffic to be expanded
What is set to change, however, is the role of Muscat Airport. It is expected to develop into a hub for air traffic between East and Southeast Asia – specifically India – and Europe. Unlike other airports in the Middle East– Muscat International Airport has no congestion and offers sufficient available slots for new entrants. Shipments originating in the Far East or the Indian subcontinent and destined for European markets, could be transshipped at Muscat and then transported from there by a European cargo airline to one of the hubs in the EU. The same applies to shipments traveling from the EU to India, Thailand or China.
Duggan declines to reveal, when asked by CFG, which potential partners he is currently negotiating with regarding main-deck feeder services to supplement his own passenger belly network. Ideally, there should be at least two: one Asian and one European airline.
Phased approach
He also points out that Muscat is an attractive transit hub for airlines shipping cargo bound for Europe, as well as for connections from Nairobi or other East African airports via Muscat to the EU.
The partnership model is part of a phased plan that, if successful, could lead to the establishment of the airline’s own freighter fleet. However, it must first prove itself operationally and financially successful before the next step might be considered by its management.
