Oman and Bahrain injecting fresh funds into Oman Air and Gulf Air

Airline Code [OMA] View More Oman Air News

(CAPA): Oman Aviation Services (OAS), operator of Oman Air, approved (28-Feb-07) plans to raise its capital base by 276.5% to USD129.9 million through the placement of 36.7 million shares with the Omani Government. The placement will increase the Oman Government’s shareholding from 34% to 81%. The new capital will be used to acquire widebody aircraft (in the 230-240 seat category).

Earlier, OAS CEO, Ziad Karim Al Haremi, stated the airline plans to operate long haul routes, “which necessitate the purchase of widebodied aircraft, together with connected logistic support”. Meanwhile, the Bahrain Government, announced plans to invest up to USD1.3 billion to increase its interest in Gulf Air to 80% by 01-May-07, as part of plans to restructure the carrier to cope with rising competition and will help fund fleet upgrade plans. The move would reduce the Oman Government's shareholding to 20%.

The dilution of Oman’s stake in Gulf Air, coupled with its focus on building up its own carrier could lead to the eventual withdrawal of Oman from the Bahrain-based carrier, as Qatar and Abu Dhabi have done – see the Perspective in this edition of The Monthly for more information.

Date posted: 26-Mar-07.

Back