Oman’s SalamAir eyes profit as Boeing MAX grounding hampers rivals

Oman budget carrier SalamAir could turn its first profit this year as passenger demand increases, partly due to the Boeing 737 MAX grounding, its chief executive said on Monday.

The 737 MAX has been grounded after an Ethiopian Airlines jet crashed in March and a LionAir jet crashed in October, killing a total of 346 people.

State-carrier Oman Air has grounded five MAX jets and flydubai in neighbouring United Arab Emirates has grounded 14, forcing both airlines to cancel dozens of flights.

That has led to an increase in passenger demand on SalamAir routes where others have cancelled services, Mohamed Ahmed told Reuters by phone.

SalamAir, which launched in January 2017, operates four Airbus A320ceo and A320neo aircraft.

The airline expects to carry about a million passengers this year, up from 800,000 in 2018, as it expands its fleet to nine aircraft, and its network to as many as 29 destinations, up from 17.

SalamAir could break even and potentially record a profit this year on the back of increased demand and expansion, and improved fuel costs, Ahmed said.

The airline had forecast to break even next year as part of a revised strategy launched under Ahmed who joined 18 months ago following the departure of its first CEO.

SalamAir plans to have a fleet of 20 aircraft and an initial public offering within five years, Ahmed said, adding that shareholders had recently agreed to increase capital.

He declined to disclose what it had increased to.

SalamAir is owned by the Omani government pension funds and the Muscat municipality.