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Oman Air’s CEO Puts Search for Allies at Center of Plans

Oman Air’s Wayne Pearce, who took over as chief executive officer two months ago, said he’s engaged in talks aimed at securing allies for an airline previously preoccupied with adding planes and routes.

“We’re making up ground and seeking out more potential partners,” Pearce said in an interview in London. “We’re in talks with people and I think something positive will come out of it. This should bear fruit.”

Oman Air is particularly keen on a tie-up with a U.S. carrier, said Pearce, with its routes to the Indian subcontinent the main selling point. The Muscat-based company, which has just three codeshare partners, including one, BMI, that’s set to disappear after being bought by British Airways parent IAG, may also be an attractive ally for a European airline, he said.

Pearce, 60, succeeded Peter Hill on Jan. 3, inheriting a company that reported a loss of 78 million rials ($203 million) in its last fiscal year even after boosting passenger numbers 38 percent to 3.3 million as the cost of building a 26-plane fleet and targeting the luxury long-haul travel market sapped margins.

‘Better Reason’

Scope for adding destinations is limited by Oman’s aircraft order book, with the next major increment not due until 2015 and the arrival of its first Boeing Co. (BA) 787s, plus the long waiting list for a new generation of short-haul planes, Pearce said.

“I want to do more with what we’ve got,” the executive said in the interview on March 5. “We want to carry more people, raise our load factor and give business people a better reason for travelling with us, including frequent-flyer programs.”

Pierce said of BMI, which is being bought by International Consolidated Airlines Group SA from Deutsche Lufthansa AG (LHA), that “everything is up for review.” The existing deal allows Oman to sell through-tickets to Belfast, Edinburgh and Manchester via London on legs operated by BMI using its own flight code, while placing the U.K. carrier’s passengers on London-Muscat services.

Oman’s other codeshare partners are Malaysian Airline System Bhd. (MAS) and Emirates of Dubai, the No. 1 international airline and a rival on inter-continental trips.

Abu Dhabi-based Etihad Airways, by comparison, has 35 codeshare partners, while even Emirates and Qatar Airways Ltd., both seeking to build transfer hubs in competition with most other major airlines, have nine and 11 respectively.

No IPO Brief

Oman Air may also seek codeshares and interlining deals, in which passengers travel on itineraries with multiple airlines, within the Gulf, Pearce said, adding that the carrier is unlikely to enlist to the Oneworld, Star or SkyTeam groupings.

“I’m not in any rush to join one of the big three alliances,” he said.

Pearce says he also has no specific brief to prepare Oman Air for a share sale, and that its state owner is focused more on attracting visitors to the country rather than on building Muscat into a transit hub to rival Dubai or Abu Dhabi.

Given that focus the carrier, which currently serves 41 destinations, is unlikely to have a requirement for planes bigger than the 787, such as the Airbus A350 or A380, he said.

To contact the reporters on this story: Chris Jasper in London at cjasper@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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