Interview: Paul Gregorowitsch
What criteria do you consider a priority when strategically positioning Oman Air to capitalise on the evolving aviation industry regionally?
PAUL GREGOROWITSCH: Considering the aviation industry in the GCC, we must always expand our fleet and route portfolio. Planning and expanding routes is strategically important for all Gulf carriers, including Oman Air. We are planning to take advantage of the sultanate’s strategic central location and offer flights and services to and from Europe, East Africa, the Middle East, and a wide range of Asian destinations. It is important that all our routes are commercially successful, as we need to maximise the return on our substantial investment in new aircraft. It would be difficult, for example, for us to make money on long-haul flights to destinations farther afield, such as the US and Australia.
That route expansion will help us to become a profit-making airline by offering air travellers an attractive alternative to other carriers. By growing, you reach economy of scale, are able to achieve the right flight rotation at medium haul, and increase the possibility of maintaining a financially sound operation. We must also cater for growth, which means putting in place the proper infrastructure, IT systems and intellectual capital.
This is where the social and economic contribution of the national carrier comes into play. With the country’s growing need to diversify away from its dependence on hydrocarbons, the prosperity of Omani companies and their ability to provide jobs is paramount. As the national airline we provide jobs, support industries, boost the hospitality sector and help to develop the tourism sector.
In terms of outsourcing certain aspects of airline operations, what would you say is the appropriate level for airlines like Oman Air?
GREGOROWITSCH: In the end, the core activity for an airline is flying, and is focused around network design and revenue planning. Theoretically, everything that is not directly related to flying can be outsourced. In reality, an airline operating certificate requires that certain functions never be outsourced, such as safety and security, flight operations, and so on. A company must therefore decide what type of airline it wants to be: a virtual airline with in-house operations kept to a minimum, or an operating airline that cannot outsource specific functions.
Today with Oman Air I do not intend to outsource functions. I can only look at becoming more professional by finding joint ventures for specific functions. If we are able to create joint ventures with a larger group or consortium, in catering or cargo for example, then we will be able to exploit their expertise and knowledge. We can also utilise their purchasing power and enter into a win-win situation of mutual growth and learning.
What role do you see air freight playing in the future development of the aviation industry in Oman? What are some of the limitations?
GREGOROWITSCH: Air freight is an important part of our current operations. This can be seen by the success of our cargo division and the joint ventures we have entered into within the GCC. We carry cargo on our aircraft but are restricted at times by the distance the cargo is travelling or its technical attributes. The bottom line is that with the current airport we cannot handle all types of goods; perishables are extremely difficult and we have limited infrastructure to move uncommon goods.
However, given the strategic position of Oman, the potential for further growth is huge. The Middle East is a global distribution centre for many products, such as bulk goods from the US or India. This is exactly the hub function we have for passengers today and the role we will have for cargo tomorrow. It will be a progressive process, though – to be successful, we must start small and deliver quality.
