Oman Air, In The airline industy and growth opportunities Dissertation

Oman Air, In The airline industy and growth opportunities - Dissertation Example Global economic recession, escalating fuel prices, competition in the sector resulting in consolidation and financial restructurings, have all been important factors leading to transformation of the airline industry in the past decade (Rosenstien, 2013). The legacy carriers or full-service network carriers (FSNC), struggling to make profits, were forced to alter their business model to minimize losses through lower operating costs. Other factors that could help minimize losses were by eliminating unprofitable routes, or introducing newer, fuel-efficient aircrafts while grounding older, inefficient aircrafts. As the legacy carriers struggled to survive, low-cost airlines (LCA)/ low-cost carriers (LCA) continued to generate profits and expand. The low-cost model in the airlines sector was pioneered by South West Airlines (SWA) in1971 with certain features that were typical of LCA during that period. However, over the decades, the model introduced by SWA has undergone a change as competition in the LCA grew. Nevertheless, different airlines introduced different features and made changes to the original SWA model depending on the macro-environment in which they operated. However, what became apparent was that demand for low-cost travel was high and airlines in this sector continued to generate profits while the legacy carriers struggled. Oman Air (OA), the national carrier of the Sultanate of Oman, is a dynamic, growing carrier. However, Oman Air faces major challenges due to ever-increasing competition and global recession. Across the world many airlines still face losses as travel and freight have declined. Most airlines have been cutting operating costs but Oman Air is pursuing its expansion strategy (Hill, 2010). The carrier has several plans it is working on – to get into the cargo business to facilitate development of cargo in and out of the country, to bring freighters in (Aerospace & Defence, 2013) and to start a low-cost carrier (LCC) in addition to the regional service that it offers. 2.0 Oman Air - Company Information Started in the early