Oman’s national carrier Oman Air is weighing a shift toward a low-cost operating model and deeper collaboration with budget players as the sultanate races to grow tourism, sharpen its competitiveness against Gulf rivals and adapt to a fast-changing aviation market. While details are still emerging, recent fleet decisions, route adjustments and partnerships point to a strategic rethink that could see the premium-focused airline embrace more cost-conscious products and structures to feed the country’s tourism ambitions.
Strategic Rethink Amid Fierce Gulf Competition
Oman Air has long positioned itself as a boutique full-service carrier, contrasting with the super-connector model of Emirates, Qatar Airways and Etihad. That niche is under pressure as Oman pursues ambitious visitor targets under Vision 2040 and as neighboring hubs double down on both high-end and low-cost capacity. Passenger traffic through Oman’s airports fell in early 2025, even as airports in Dubai, Qatar and Saudi Arabia posted strong growth, highlighting the urgency of recalibrating the national carrier’s role in the country’s tourism ecosystem.
At the same time, Oman’s only established low-cost airline, SalamAir, is expanding aggressively, adding aircraft, destinations and product innovations that directly support the country’s tourism agenda. SalamAir carried more than 3.2 million passengers in 2024 and has signaled plans to grow its fleet to around 25 aircraft by 2028, targeting 8.5 million annual passengers as part of Oman’s broader tourism strategy. That low-fare growth has started to outpace Oman Air’s more restrained, premium-centric expansion path, sharpening the contrast between the two national players.
Against this backdrop, industry analysts and local tourism officials increasingly see a hybrid or low-cost tilt at Oman Air as a logical next step. The aim would not be to abandon the brand’s service reputation, but to develop a leaner cost base and more flexible fare structures on key regional and leisure routes, enabling Oman to compete more effectively for price-sensitive travelers while preserving higher-yield segments on long-haul and premium services.
Tourism Targets Put Pressure on Capacity and Cost
Oman has set out some of the Gulf’s most ambitious tourism goals, seeking to raise the sector’s contribution to GDP from roughly 2 to 3 percent in the early 2020s to 5 percent by 2030 and 10 percent by 2040. That vision hinges on air connectivity: the ability to bring millions of visitors to Muscat, Salalah and emerging regional gateways at prices that compete with neighboring destinations. Yet route cuts and capacity reductions by Oman Air over the past two years have created concern among hoteliers and tour operators who depend on predictable, affordable airlift.
The Ministry of Heritage and Tourism has responded by turning to charter flights and incentivizing foreign airlines to plug gaps where scheduled services have been reduced. Between October 2023 and April 2024, Dhofar alone welcomed around 500 charter flights, a model the ministry now plans to expand to Muscat, Suhar and Musandam as new airport infrastructure comes online. While charters can bridge short-term demand, policymakers see structural changes in scheduled capacity and pricing models as essential if Oman is to reach its goal of attracting up to 16 million tourists by 2040.
In this context, a more cost-efficient Oman Air, possibly operating a dedicated low-cost arm or reconfigured sub-fleet, could become a core instrument of national policy. Lower unit costs would allow the carrier to sustain higher frequencies on leisure-heavy routes, support seasonal surges such as the Khareef monsoon in Dhofar, and offer competitive package pricing in partnership with tour operators, all without chronic reliance on subsidies.
Learning from SalamAir’s Low-Fare Playbook
Any move by Oman Air toward a low-cost operating model will unfold alongside SalamAir’s rapid rise as the country’s de facto budget airline. Launched in 2017, SalamAir has doubled down on low-fare strategies over the last two years, including promotional domestic fares as low as about 10 Omani rials between Muscat and Salalah, capped round-trip prices during the Khareef season and discounted year-round fares for citizens on key routes. These initiatives have helped turn internal tourism into a mass-market proposition, particularly during peak holiday periods.
SalamAir is not only discounting tickets. It is also innovating on product design, rolling out a subscription-based “mOVEmore” program that offers frequent flyers fixed fares on domestic and Gulf routes, priority services and simplified booking. The airline has partnered with travel technology providers to power the subscription model, signaling a willingness to experiment that sets a benchmark for any Oman Air cost-focused spinoff or product line.
Crucially, SalamAir is aligning its fleet expansion directly with national tourism goals. It plans to add around 10 aircraft over three years, including new Airbus A320 and A321neo jets, with a roadmap to grow to 25 aircraft by 2028 and even more toward 2040. That capacity is earmarked for new domestic points, underserved regional cities and leisure routes that can funnel travelers into Oman’s resorts, heritage sites and adventure tourism hubs. The success of this low-fare strategy, with full aircraft and demand often outstripping supply, underscores the latent market that a retooled Oman Air could tap.
Codeshares, Alliances and a More Layered Network
Rather than acting as direct rivals, Oman Air and SalamAir have increasingly functioned as complementary pillars of a joint national aviation strategy. A deepened codeshare agreement between the two carriers allows premium and budget operations to feed each other, with SalamAir providing low-cost regional lift and Oman Air offering long-haul and higher-service connectivity. This layered network approach is becoming standard in the Gulf, where legacy and low-cost brands coexist under common ownership or strategic umbrellas to capture a full spectrum of demand.
Oman Air has also moved to strengthen its international reach through global partnerships, including its recent entry into the oneworld alliance and the launch of Oman Air Holidays, a digital platform built in cooperation with a global tour operator. The holidays platform packages flights, hotels and experiences into curated itineraries, positioning Oman as a turnkey destination for travelers who might previously have booked Dubai or Doha by default.
A shift toward a low-cost model in parts of Oman Air’s network would dovetail neatly with these initiatives. Affordable feeder flights from secondary Gulf and South Asian cities into Muscat, for example, could link straight into oneworld long-haul departures or packaged stays booked via Oman Air Holidays. Codeshares with SalamAir could further smooth the customer journey, offering a single booking reference even as travelers switch between a budget seat and a full-service cabin on different legs of the same trip.
Domestic Connectivity and the Khareef Test Case
Oman’s aviation sector is already experimenting with quasi-low-cost approaches on domestic routes, particularly around the Khareef season that draws large numbers of visitors to Dhofar. For the 2025 season, the Civil Aviation Authority coordinated a major capacity increase to Salalah, with Oman Air adding more than 70,000 seats and SalamAir expanding its available seats by nearly 60 percent. Both carriers committed to fixed fares for Omani citizens throughout the July to mid-September peak, essentially creating a capped-price, high-frequency shuttle between Muscat and Salalah.
Airports operator Oman Airports complemented these moves by introducing innovations at Salalah Airport such as an extended early check-in service and, for the 2025 season, a drive-through check-in option that lets passengers complete formalities and drop bags from their vehicles. These measures reduce bottlenecks and help absorb surging demand without undermining service quality, a challenge that any future low-cost model at Oman Air would have to address more broadly across the network.
The Khareef operations provide a kind of living laboratory for low-cost principles within a national carrier framework. High aircraft utilization, simplified fare structures, dense shuttle-style scheduling and ancillary service upselling are all on display. As authorities assess outcomes from recent seasons, the lessons learned are likely to inform how far and how fast Oman Air leans into similar practices year-round and on international leisure routes.
Route Adjustments, Charters and Filling the Gaps
Oman Air’s gradual reduction of certain routes, citing profitability concerns and network optimization, has left noticeable gaps in connectivity. Some international carriers have also trimmed or suspended services to and from Oman, prompting concerns that the country could lose ground in the intense competition for regional traffic flows. Tourism authorities have responded by incentivizing carriers such as IndiGo and Russian airline Red Wings to launch new services into Muscat, while turning to charter operators to sustain visitor flows to Dhofar and other key regions.
These stopgap measures highlight a structural challenge. Without a cost base that allows Oman Air to profitably sustain thinner or seasonally volatile routes, the country risks becoming overly dependent on foreign airlines whose network decisions are driven by their own commercial priorities. A more low-cost-oriented Oman Air could reclaim some of that connectivity by operating with leaner overheads on secondary international routes, particularly where tourism potential is strong but yields are modest.
For example, budget-friendly links to smaller Indian, Central Asian or East African cities could unlock new visitor segments attracted by Oman’s nature-focused and culturally rich tourism offering but constrained by price sensitivity. Similar dynamics apply within the Gulf, where SalamAir’s recent launch of Muscat–Abha flights in Saudi Arabia, operated on a low-cost basis, illustrates the kind of regional connectivity that a more flexible Oman Air model might replicate or complement.
Balancing Premium Brand Equity with Low-Cost Realities
One of the central questions facing Oman Air is how to reconcile its established premium identity with the operational discipline and product simplification associated with low-cost carriers. Historically, the airline has prided itself on spacious cabins, high-quality onboard service and an emphasis on comfort that differentiates it from some regional competitors. Industry observers say that any pivot toward lower-cost operations will have to be carefully calibrated to avoid diluting that brand equity.
Several possible paths are on the table. One is a dual-brand strategy, in which Oman Air maintains its full-service positioning on long-haul and key regional business routes while introducing a distinct low-cost sub-brand or configuration for high-volume leisure markets. Another is a hybrid model, where the same aircraft and brand operate in a more stripped-back fashion on shorter segments, with buy-on-board catering and tighter seating, but retain a fuller service offering on long journeys. The codeshare arrangement with SalamAir already provides a third lever: Oman Air can outsource a portion of low-fare demand to its budget counterpart while focusing on premium traffic and strategic trunk routes.
Whichever path emerges, the pressure to act is clear. Gulf travelers are increasingly price-aware, and the region’s booming low-cost sector has set new expectations around no-frills fares, ancillary options and mobile-first booking. To remain relevant in this environment, Oman Air will need systems, fleet planning and workforce structures that can support both efficiency and service. That will require investment in digital platforms, revenue management and cost control, not just a tweak to fare classes.
Implications for Travelers and Oman’s Tourism Future
For travelers, a more low-cost-infused Oman Air model would likely translate into greater choice and sharper price competition on key routes, especially to and from leisure destinations. Residents could see more frequent domestic services at predictable price points, similar to the Khareef-season fare caps, while international tourists might benefit from competitive bundled offers that package flights, hotels and experiences under the Oman Air Holidays umbrella.
Tourism stakeholders are watching closely. Hoteliers, tour operators and regional development authorities have all argued that reliable, affordable airlift is the missing link between Oman’s natural and cultural assets and the visitor numbers the country is targeting. If Oman Air can execute a cost-conscious strategy without compromising safety or service, it could become the backbone of a more resilient tourism economy, complementing SalamAir’s expansion and the efforts of foreign carriers operating into the sultanate.
For now, Oman’s aviation landscape is in transition, shaped by shifting demand patterns, technological innovation and intense regional competition. The direction of Oman Air’s next strategic moves, particularly around low-cost operations and deeper integration with SalamAir, will go a long way toward determining whether the country can translate its long-term tourism vision into sustained, broad-based growth.