Oman Seeks to Raise $6 Billion for Aviation Industry Expansion

(Bloomberg) -- Oman Aviation Group is seeking about $6 billion to fund the building of new airports and an expansion of the loss-making national airline.

The state-owned holding company plans to raise the funds through a sale of assets or by taking on more debt, Chief Executive Officer Mustafa Al Hinai said in an interview in the capital, Muscat, on Tuesday. The Persian Gulf firm is in talks with international banks for a multi-tranche loan starting June 2020, he said, while a privatization plan is likely to take as many as three years to put together.

The largest Arab crude producer outside OPEC, Oman’s finances have been battered by a slump in oil prices, pushing the government to look for alternative sources of revenue. Investment in the aviation industry would help the government develop tourism as a greater contributor to the economy, but credit rating agencies say much is yet to be done.

Oman Air, which receives state support to fund loss-making internal routes, is expected to make a profit in 2026, said Al Hinai. The carrier reported revenue of 83 million rials ($216 million) in 2018, an 18 percent increase from a year earlier. A Saudi-led boycott of Qatar that hampered that nation’s carrier boosted passenger numbers by 5 percent.

Expansion plans for Oman Airports include a target of 40 million passengers by 2030 from 17.8 million in 2018, the CEO said.

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