Saving Proposal for Oman Air

OUR OMAN AIR 2 WELCOME TO 21st CENTURY. IN THIS CENTURY LEADERSHIP WILL BE A COMPETITION OF IDEAS, MANAGE- MENT WILL BE MANAGEMENT OF THOSE IDEAS. PROPOSAL FOR EASY THE WAY TO LONG TERM BRIGHT SMILE WAYS TO RECOVER TO OMAN AIR IS TO FROM CORONA PAN- SAVE MILLIONS OF DEMIC LOSES. OMR STARTING FROM NOW Proposed by CD Mohamed Al Aufi

Table of contents P3 P4 1. Cover letter P7 2. Saving from Hotels P8 3. Saving more on CREW MEALS P9 4. Oman Air own Fashion Brand P10 5. Saving on Crew uniforms P11 6. saving on Suitcases P12 7. Saving on Cabin trolleys P13 8. Saving on Shoes P14 9. Saving on Handbags P16 10. Cutting cost on duplicate service products P17 11.Saving on various products P18 12.Quick outlook of the proposed saving P19 13. OMAN AIR COULD SAVE THIS MUCH IN ONE YEAR P20 14. Oman Air own onboard duty free P21 15. Oman Air Could guarantee duty free sales onboard P22 16.Oman Air Airport Duty Free P23 17.Oman Air/Oman Aviation Jet Fuel Supplier P24 18.Technical Landing 19.International Cargo Hub

Dear Mr. Hilal, 19th June 2020 It is my honour and pleasure to submit my second proposal for massive savings to you. As all of us are committed in rebuilding our lovely company especially after COVID 19, I am glad that you the higher management are welcoming us, lower level employees to share our ideas and suggestions for improving Oman Air balance sheet. Here is my second round of humble ideas and suggestions of which I believe could help our lovely company not only to save massively but to open new streams of making money. Let me admit that some of my ideas could be considered by some as a long-short or very orthodox. Example of MCT International Airport to turn into International Cargo Hub, Technical Landing airport, Oman Air in co- operation with Oman Aviation Group to be Jet Fuel Supplier, Oman Air to start its own Duty Free onboard and at the Muscat International Airport. But any realistic eyes could see the greatest future for Oman Air within my suggestions. Suggested reforms in purchasing from vendors to manufactures or from manufacturer to better manufacturer in areas of Crew Uniform system (clothing to shoes and bags), Hotel payment philos- ophy, some service products and second round of CREW MEAL adjustment, Oman Air could save up to 3,747,295.000 OMR a year. The good thing is we have established direct contact with the suppliers of all proposed products in this presentation. I believe Oman Air is destined to be one of the greatest airline in the region and in international are- na. I will be glad to present to you and other higher management both of my suggestions submitted to you. It is my sincere hope that my suggestions will meet your optimum consideration CD Mohamed Al Aufi WhatsApp 992320360

Saving on Hotels There is no doubt that these are some of the toughest times for the hotel industry in the world. Hotels are hit hard by the Covid-19 pandemic, the industry is on its knees . There are a lot of sources providing insights about the impact of the coronavirus on the hotel in- dustry, providing advice on pricing, marketing strategies and so forth. Analysts at UBS estimate that tourist spending across Europe fell 68% year-on-year in March 2020, with the UN World Tourist Organization calling tourism one of the industries \"hardest- Oman Air could use this window of opportunity for hit\" by COVID-19. vital savings. If the BLOCK ROSTER SYSTEM will Since airlines are bleeding too, the hotels situ- be adopted, many hotels rooms will be rented an- ation have just created a new platform for nually. The proposed saving for the hotels will new pricing discussion with contracted clients eventually cut very large potion of annual overhead such as Airlines. cost for Oman Air Oman Air could save more by paying Here are 4 potential ways Oman air could save mon- ey in this proposed hotels payment philosophy. hotels in advance. I know in a face value maybe it will look like 1 if Oman air sign long term contracts with hotels let why Oman Air have to spend huge money at say 5 years. Long term commitment rewards best in once where there is a chance of paying in in- pricing. besides, Room prices wont go high for next 5 stallment style. years. The answer is very simple, every single hotel 2. if Oman Air pays hotels one year fees in advance. we are using and we are going to use if block This strategy could give Oman air the upper hand in roster is adopted, is in dire cash trap. These pricing and facilities negotiations. Price will definitely hotels will highly appreciate the initiative of be even lower once Oman Air becomes a most valu- paying them one year fees in advance. in re- able client. turn Oman Air could negotiate extra facilities 3. If block roster is adopted and Oman Air agreed to such as free lunch and dinner buffet along with pay one year upfront and if negotiation for extra facil- free breakfast buffet for crew. ities are accepted, Oman Air could save 5 OMR from Are we asking for too much? No, we know Layover allowances per crew per day. how buffet works, everything cooked must be 4. Oman Air could safely cut up 60% of the first crew consumed or otherwise goes to the bin. Taking meals if Oman Air pays one year upfront to the ho- the current situation into deep consideration, tels and if 3 meals are provided in the hotels. many hotels will sign the contract with a big NOTE: Hotels wont be able to change to contract smile. during the contract period signed.

1 LONG TERM CONTRACT This is a very valuable contrition towards the goal of Signing with hotels with long term contracts being a profitable company. The positive impact will will secure price stability for the agreed peri- be very visible. od. The longer the period the better it is for Here, we have to see this issue into a reality point of Oman Air. We have to take into our consider- view. It is true that Oman Air pays 30 OMR per crew ation that Crew are not tourist, all needed is a per layover per day. But in reality crew receive safe hotel with all required security features equivalent of between 25 to 28 ORM. This is due to and closer to the shops if possible or hotels to fact that rate of exchange and commission is applied prove shuttle buses. in many hotels. Crew pay for the rate of exchange and commission that’s why crew receive between 2 Paying Hotel One Year Upfront 25 to 28 OMR per layover per day. SOLUTION TO CREW LAYOVER ALLOWANCE If Oman Air will adopt this philosophy of pay- AFTER REDUCTION OF 5 OMR ing hotels one year in advance, room prices will come down by noticeable margin. Let say In that regard if Oman Air pays 25 OMR per layover among other benefits, room prices will be sold per day but in salary not in the hotels, crew wont feel the difference as 25 OMR plus minus is the same to Oman Air in wholesale prices. amount they receive anyway. Provided crew get This will be a turning point into massive sav- those proposed 3 meals in the hotels. ings on many fronts. Oman Air will see streams of saving coming from different an- The situation will be a win-win situation, Oman Air will save money and crew receive more money at gles as laid down in this proposal. the end of the month by getting allowance in lump- 3.SAVING FROM CREW DAILY LAYOVER sum in salaries. ALLOWANCE This idea is best workable only if the pro- 4. MORE SAVING ON CREW MEALS posed block roster is adopted and the all ho- Once everything is set and goes flawlessly as tel agreed with Oman Air proposal of upfront planned. Oman Air can save more money in crew payment for 12 month calendar with free ser- meals. Once crew are provided three meals in the vices which includes buffet for lunch, dinner hotel, Oman Air could cut all crew meal in all short and breakfast sectors. If crew are offered breakfast, lunch and din- Let us take an example of 5 or 4 intra gulf sectors, ner as a part of the hotel package, it will be Crew Meals could be provided only once or twice de- safe and sound for Oman Air to cut 5 OMR pending on the time of the day. In total Oman Air per crew from Crew daily layover allowances. could save between 50 to 70% on the first crew Maybe 5 OMR is not that much but if we take meal. This is on top of the saved second meal and from each Pilot and crew in the period of one fruits. year up to five years the number will make a This proposal alone will save Oman Air a lot of mon- full business sense. ey. While crew appreciate the new move, Oman Air I have no doubt that crew wont complain as will appreciate massive savings. the most important part of the day will be cov- When Oman Air save on crew meals, it is not only ered by Oman Air, that is three meals. meals but all that comes with meals trays such as Oman Air will save almost 800,000 OMR a cutlery packs, tray mats and more. year

CREW ALLOWANCE SAVING WB HOTELS ROOMS A YEAR SAVED ALLOWANCE 25x12 rooms 109,500 547,500 OMR CREW ALLOWANCE SAVING NB SAVED ALLOWANCE 219,000 OMR HOTELS ROOMS PER YEAR 20 X 6 Rooms 43,800 60% SAVINGS 257,544 OMR CREW MEALS SAVING WB MEALS PER FLT PER COST PER YEAR YEEAR 429,240 OMR 28 X 12 x 365 X 3.5 OMR CREW MEAL SAVING NB MEALS PER FLT PER YEAR COST PER YEAR 60% SAVINGS 404,712 OMR 88 X 6 x 365 x 3.5OMR 674,520 OMR ANNUAL SAVING AREA OMR CREW ALLOWANCE WD 547,500 CREW ALLOWANCE NB 219,000 CREW MEAL SAVING WB 257,544 CREW MEAL SAVING NB 404,712 TOTALS 1,428,756

SAVING MORE ON CREW MEAL If all the above was successfully implemented, more saving will be observed automatically. For example, when Oman Air reached the possibility of cutting first crew meals to 60% level, Oman Air will save on cutlery packs, Tray Mats, water couplets, aluminum casseroles, all other disposable tray set up items. If we count on these products in annual consumption the number is not small at all. PRODUCTS TOTAL WB FLEET/CREW ANNUAL CATLERY PACKS SAVINGS 12 x 28 x 365 122,640 TRAY MAT 12 X 28 X 365 122,640 WATER COUPLETS We did not count the saved money from the discount-12 X 28 X 365122,640 ALUMINUN MEAL CASSE- ed rate of the hotels rooms if Oman Air pays one year12 X 28 X 365122,640 ROLES upfront. And other tray set up items. TRAYS RPUNDS There must be a significant saving from the scheme.12 X 28 X 365122,640 NB FLEET/CREW ANNUAL PRODUCTS 88 X 6 X 365 192,720 88 X 6 X 365 192,720 CATLERY PACKS 88 X 6 X 365 192,720 88 X 6 X 365 192,720 TRAY MAT 88 X 6 X 365 192,720 WATER COUPLETS ALUMINUM MEAL CASSE- ROLES TRAYS ROUNDS PRODUCTS TOTALS 60% SAVED COST SAVING CATLERY PACKS 315,360 189,216 PCS X 0.310 58,656.900 TRAY MAT 315,360 189,216 PCS X 0.004 756.864 WATER COUPLETS 315,360 189,216 PCS X 0.300* 56,764.800* ALUMINUM MEAL 315,360 189,216 PCS X 0.209 39,546.144 CASSEROLE 315,360 189,216 PCS X TRAYS ROUNDS GROSS SAVINGS 60% OF 1ST CREW 155, 724.708 155,724.708 MEALS 1,428,756.000 OMR 1,584,480.708 FROM 1 YEAR HOTELS UPFRONT PAYMENT TOTAL SAVING

A PROPOSAL OF STARTING OMAN AIR FASHION BRAND I am proposing to start Oman Air own brand NEW LOOK for suitcase, trolley bags, handbags, shoes All the proposed products are of new and modern and uniforms. look, that is the indication of progressiveness. From By owning our own brand, Oman Air will save suitcases, trolley bags, handbags, shoes for male , massively and sometime with better quality female and cabin shoes will prove the case. products. By running our own brand, we can Uniforms are already aligned with the new look and negotiate the quality we want, we can control they are excellent look. We are going to suggest prices according to our need of the time and some changes such as manufacture and quality of we certainly maintain every aspect of stand- material used. Good quality that comes with much ard. cheaper price. CREW COLLECTION OF NEW BAGS EVE- RY 2 TWO YEARS AND SHOES EVERY CURRENT QUALITIES ONE YEAR. Needless to say but the current qualities for every This is a very expensive proposition and many products is a bit questionable. Brand new handbags senior crew has a huge collection of suitcase TSA locks are not working, suitcase 4 Spinner 360 and trolley bags at home. No one is benefiting Degree Wheels keep falling off. Shoes for both male but vendors. and female crew are easy imitation. Trolley bags I would like to suggest that suitcase, trolley has issues with handles. bags, handbags and shoes shall be changed All the above issues can be easily rectified while only when they are not usable anymore. saving huge money for Oman Air. The new proposed products are of high quality which is expected to last longer. Therefore they can fit well with the new proposal. PROPOSED PRICES All shoes and handbags are made of genuine All proposed prices are FOB with Oman Air Logo leather. Suitcases and trolley are made of Alu- and brand name. since we are proposing to buy from minum, the latest style of suitcases and cabin manufactures minimum buying quantity is applica- bags. ble. However, our normal requirement is well ex- ceeding the minimum purchasing number. Color scheme MATERIALS In this proposal, I have used pictures of vari- The best part of dealing with manufactures, there is ous colors but Oman Air will choose the final a room of choose suitable materials of every prod- color for each product. uct. Sometimes Oman Air will need to go on certain budget so maybe certain material can be used for certain period of time.

SAVING ON UNIFORMS These good looking uniforms could come to Oman air with huge savings. The saving that could reduce Our current uniform are fabulous, well de- the burden when it comes to uniforms. signed and look good in crew both male and female. We did huge and rewarding efforts in Oman Air could save up to 167 OMR per crew. If we upgrading and face-lifting crew looks. take consideration of the number of crew as of Feb 2020. at least 346,358 OMR could saved from Having said that, there is away to save mas- Crew . Savings on Pilot uniforms could noticeable as sively on uniforms while adopting far better well. This is one of the opportunity that Oman Air quality and maintaining same beautiful design could take to cut cost product by product. and colors. It is true that we have signed a contract with the current supplier but due to corona virus, Oman Air have a sound excuse to void the current for better supplier who is a manufac- ture of various uniforms including of Airlines. The saving could be easily noticeable. QUALITY Oman Air can choose from polyester/viscose or polyester/cotton fabrics. Or quality that suits crew personality. PROPOSED NEW PRICING Items Old prices New prices Saved OMR 143 167 With the above quality crew uniform with Female Crew 310 143 167 Oman Air logo and brand name will cost as 154 106 follows per one full set Male Crew 310 Pilots: 400USD Pilots 260 M/F Crew: 370USD

SAVING ON SUITCASES A 28” Suit- Inner Mate- Full lining 190D/210D, with mesh pocket, shoes bags, wash bag case rial or depend on customer's requirements Trolley 100% interior aluminum or Iron trolley system Zipper #8, #10, #16, #20 Carry han- Top & Side, soft or aluminum are available dle Lock 3 digital number lock, TSA lock, Padlock Logo & Col-Customized or Currently Oman Air is spending 34 OMR per suitcase. These suit- cases are changed in every two years regardless of the condition. With the proposed quality, there will no need of issuing new suit- cases to crew unless suitcases are not usable. These two proposed suitcases are from the same manufacture and they will be made with Oman air logo and name. WHOLESALE PRICES The above suitcases FOB 23 USD The bellow suitcases FOB 38 USD Both bags are 28 inches equal size to the bags we are cur- rently using. Macaron color Durable PC Hard-shell TSA Lock Spinner Suitcase Aluminum Frame Luggage aluminum lock set Outer Mate- PC/ABS/PP/1680D or Aluminum rial 28” suit- Inner Mate- Full lining 190D/210D, with mesh pocket, shoes bags, wash bag or case rial depend on customer's requirements Trolley 100% interior aluminum or Iron trolley system Zipper #8, #10, #16, #20 Carry han- Top & Side, soft or aluminum are available dle Lock 3 digital number lock, TSA lock, Padlock Logo Customized

Saving on Cabin bags Cabin Trolley Bags Cabin bags we are using right are far more expensive especially for quality provided. Hence, we have the straight path of saving potential huge money on the trolley bags. MODERN LOOK Oman Air could not only save money on trolley bags but proposed cabin bags are modern styled and look very attractive. It will boost crew confidence and same time huge money at the same. The proposed Trolley bag cots 19USD & 28USD FOB direct from manufacturer. This is the same manufacture of the proposed suitcases. Outer Material PC/ABS/PP/1680D or Aluminum A 20” Cabin Inner Material Full lining 190D/210D Trolley Bag Trolley Zipper 100% interior aluminum or Iron trol- ley system #8, #10, #16, #20 Carry handle Top & Side, soft or aluminum are Lock available Logo 3 digital number lock, TSA lock, Pad- lock Customized Color customized Macaron color Durable PC Hard-shell TSA Lock Spinner Suitcase Alu- minum Frame Luggage aluminum lock set Outer Ma- PC/ABS/PP/1680D or Aluminum terial A 20” Cabin Trolley Bag Inner Ma- Full lining 190D/210D, with mesh pocket, shoes bags, wash terial bag or depend on customer's requirements Trolley 100% interior aluminum or Iron trolley system Zipper #8, #10, #16, #20 Carry han- Top & Side, soft or aluminum are available dle Lock 3 digital number lock, TSA lock, Padlock Logo Customized Color Customized

Saving on shoes Upper Material: Genuine Leather Insole Material: Leather Lining Material Genuine Leather Cow or Sheep Genuine Leath- er type Anti-Slippery, Sweat- Feature: Absorbant, Light Weigh These male crew shoes are professional office shoes. Made of high quality and durability. The man- ufacturer of these shoes in in New Delhi, India. He is ready to deliver to Indira Gandhi International Airport. These shoes will cost Oman Air 7.80USD FOB, in a wholesale price. The best part of these shoes is not only Oman Air will save massively but Oman Air can choose even the leather if it should be cow or sheep or goat leather. By signing with the manufacture, Oman Air will control prices, quality and delivery calendar. black color genuine leather Female Quality genuine female leather Airport and cabin shoes shoes The new proposed Female Crew medium The upper Genuine leather is very soft, which heel shoes let us call them “Airport Shoes” is comfortable for walking are of high quality with durable life span. Breathable lining is unique design for your These shoes represent modern trend and not feet only comfort but also will increase confidence. rubber outsole is light for working easily The shoes were designed for female military Suitable heel height is fashionable and ele- officers. But fortunately they are sold in the gant for both Airport and cabin shoes price range suitable for Oman Air Crew too. Our crew will be proud of the quality and the These very high quality shoes will be availa- comfort. ble to Oman Air at 9.50USD FOB per pair, wholesale price, for both airport and cabin material: grain leather shoes Lining Material: Genuine Leather Upper Material: Genuine Leather Outsole Material: Rubber Insole Material: Rubber

Saving on Handbags One of the conditions of choose a handbag for female crew is to have “Security”. If the handbags couldn't pro- vide security, that bag could be classified as not safe to use. With all my respect, current female crew handbags can’t pass to be a part of the crew uniform as the TAS locking mechanism does not work. I mean from the day one of using the bags crew found the default. We as an international airlines must abide with all international rules and regulations we have to give security its due priority. I have two proposals for Female Crew handbags of Material Learher which potential huge money could saved. Both will come Thickness customized with Oman air logo and brand name Size customized LOGO & Name Customized 1 Genuine Leather handbags 16.00USD 2. PU leather Handbags The Genuine Leather Handbag is made in India and it Prices could cost Oman Air 26.80USD FOB on wholesale or- ders While the PU Leather bags are made in China and could cost Oman Air 4.90USD FOB on wholesale orders. All the above will come with Oman Air logo and brand name. Material PU Size 25x16x12cm ; or customize according t Logo & Name o customer Customized Structure Inside with a zipper pocket + Price phone pockets 4.90 usd

Cutting cost on duplicate service products Some of the service products we are using currently are duplicated. We have two different products but doing the same tasks. Most of these products are disposable and few are reusable. One way of cutting cost is to choose one of these products and cut the rest. In this way of thinking Oman Air might save huge money as at least 04 products currently on circula- tion will be stopped. I have identified those products below for your information. These two products are both used to serve tea and coffee in EY. Tea and coffee cups comes in disposable and reusable format. However, it cost money to buy all three products of which have similar use. These two products are used in EY to serve hot and cod drinks accordingly. However, the service could be completed easily by just one of the prod- ucts. Again, buying 2 products of which are doing the same purpose. By stopping one of those prod- ucts money could be saved. EY plastic tea cups are used equally with smart cups. In some sectors passengers get their tea and coffee in a smart cup and in some in plastic tea/coffee cups. If disposable and reusable tea cups will be stopped in favor of smart cups, huge money will be saved. Currently, smart cup is a common denominator, it plays the role of all other items, It could cheaper for Oman Air if the smart cup will used in place of rotable Tea/coffee cups, plastic water glasses and disposable tea/coffee cups. The calculation is the bigger the number purchased the lower the price is. So that will be a win—win situation for Oman Air.

Cost reduction from disposable products Bellow products are very beautiful and they present Oman Heritage to our clients but they are very costly especially at this time of dire need. It is very obvious that Oman have to have luxury of pam- pering passengers with artistically made products, but maybe the time is not right for that. EY Cutleries The cutleries themselves are EY cutleries are also well designed to appeal designed with the matching col- ours. Needless to say, they look to anyone who might use it. The colors and very good and they are well pre- picture is depicting Oman Heritage and I am sentable. They speak loud sure we are very proud to bring awareness about our standard. from travelers about Oman Heritage. It is also very that the colored and pictures Again, it is also true that colored cutlery sets cost far more money than the cutleries cost more money. Blank ones. Suggestion SUGGESTION We should go for white stand- For the time we should ard plastic cutleries and save consider dropping the money. 0.130 picture and color. 0.0109 Blank will do the job.

Below is a demonstration of how Oman Air could save Products sold in USD, Rate of exchange 0.382. savings indicated are per single item ITEMS CURRENT RPICES PROPOSED PRICES PROPOSED DAVINGS Carts large Carts small 250 OMR 118.420 131.580 Cutlery packs 6/1 215 OMR Disposable tea cups 0.0310 OMR 93.600 121.400 EY disposable head- 0.0160 OMR sets 0.143 OMR 0.0109 0.0201 Handbags Plastic Seals 29.500 OMR 0.0084 0.0076 Plastic red reals 0.0110 OMR Smart Cups 0.0210 OMR 0.066 0.0640 Shoes Male 0.0160 Shoes Female 14 2.865 26.635 Shoes Cabin 13 0.0080 0.0030 Suitcases 17 0.0080 0.0040 Trolley Bags 34 0.0067 0.0093 Uniforms Male 34 2.900 11.100 Uniforms 310 3.629 9.370 uniforms 310 3.629 13.370 260* 8.786 or 14.516 25.214/19.484 7.258 or 10.696 26.742/23.304 141.340 168.660 141.340 168.660 152.800 107.200* The given current prices are not necessarily current, but they are plus minus * is a pain guess of the price

QUICK OUTLOOK OF THE PROPOSED SAVING FROM CREW COMPLETE REVI- SION ON UNIFORMS IN ANNUAL BASES PRODUCTS NO OF CREW OLD COSTS NEW PROPOSED TOTAL SAVINGS OMR 42,067 COST OMR OMR 20,020 Handbags 1,426 18,694 2,669/8,716 42,064/33,360 24,242 Shoes Male 1,430 (C + P) 97,512 4,147 15,873 70,856 Shoes Female 1,438 (C + P) 203,980 5,218 13,476 442,060 Shoes Cabin 1,426 203,840 5,162 19,080 Suitcases 2,868 25,146/41,631 72,366/55,881 Trolley Bags 2,084 15,126/22,291 55,730/48,565 Uniforms Male 658 93,002 110,978 Uniforms Female 1,426 201,551 240,509 Uniforms Pilots 772 M +12 F 119,796 84,044 Grand Totals 1,123,271 471,817/501,514 654,120/621,766 Fleet Tail Registration EY Pax configuration 196 A330-200 DA, DC, DF, DG 265 255 A330-300 DH, DI, DJ, 204 249 A330-300 DZ 258 232 A330-300 DB, DE, DD 150 787-8 SA, SB 144 7878-9 SC, SD, SE, SH, SI 171 787 –9 SF, SG (3C) 737-800 BH, BL, BQ, BV, BW, BX, BAA, BAB, BAC, BAE, BAF, BAG, BAH, BA 737 NG BF, BG, BM, BU, 737-900 BI, BK, BT, BY, BZ

OMAN AIR COULD SAVE THIS MUCH IN ONE YEAR If we give it a quick estimation that in average, Oman Air carries 180 passenger per aircraft. This grouping will give us estimated number of each item used annually and it estimated cost. Oman Air operates 116 a day out of which 88 are turn around and 28 are layovers. Based on that we can esti- mate how much Oman Air could save. This numbers are plus minus. COST PER SINGLE SECTOR NUMBER OF PRODUCTS OLD COST OMR PROPOSED PROPOSED SAV- PASSENGERS 236,257.200 COST OMR INGS OMR 153,186.200 180 X 116 X 365 = Cutlery packs 83,071 7,621,200 57,921.120 7,621,200 Disposable tea 121,939.200 64,018.080 586,832.400 cups 797,939,720 7,621,200 EY disposable 1,089,831.600 502,999.200 headsets TOTALS 1,448,028.000 575,088.280

Oman air own onboard and airport duty free How much does it cost just to have a duty free cart onboard? There are several costs associated with duty free carts. salary for people doing inventory, stocking the carts, hawking duty-free on board, managing ac- counts, etc. All told, it is guessed the break-even cost would be in the $400 range. Those costs would be Oman Air recently decided to pull the glug on even higher or less depending on fuel cost and sala- its onboard duty free sales. It is not strange ries. though as some prominent airlines initiated Why do airlines continue with inflight duty-free this path before, that includes major airlines in sales? the world such Delta Airlines, American Air- The short answer is that for some airlines at least, lines, KLM and Qatar Airlines. inflight duty-free sales are big money spinners. In 2015, GuestLogix, which at the time was processing WHAT WENT WRONG WITH THE DUTY on-board duty-free sales, put the annual figure for on FREE PROGRAME? -board duty-free sales in excess of US$3 billion. Some airlines were said to be turning over between $100-$200 million every year in inflight duty-free There are three main root factors which are sales, but it's a mixed picture depending broadly on recognized as a leading to the collapse of the where the airline calls home. (https:// duty free programs. www.traveller.com.au/why-do-airlines-still-offer-inflight-dutyfree- 1 All Airlines are using vendors as providers grq43a ) of duty free merchandises. Korea Airlines with its sky shop program sold around 2 Another root problem is that carriers are not 200 Million USD in 2015 and 168 Millions USD in able to offer products that passengers want to 2016. buy at a reasonable price against super com- petitive retail environment. WHAT PASSANGERS BUY FREEQUENLTY? 3 All vendors are selling same products over According to GuestLogix the following catego- and over again around the year. ries are sold in ranking The above three factors are the main reasons 1 Skin Care products why Oman Air duty free sales plummeted. 2 Make up and Perfumes Let us look just a bit deeper on those three 3. Jewelry root problems. 4. watches 5 Alcohol We will take example of Delta and American airlines both stopped duty free sales. Both airlines blamed it on disputes with DFASS, 6. Cigarettes. the duty-free vendor they commonly use.

OMAN AIR COULD GUARAN- TEE SALES ONBOARD IF WE START OUR OWN DUTY PRO- Here are few suggested solutions for Oman Air duty free proposal. 1 Oman Air could start its own duty free with- out third party vendors. 2 Oman Air will buy all products direct from manufacturers and the main wholesalers of various products. 3 Oman Air will get those products at very low prices, so Oman Air prices should be always MORE WAYS TO MAKE MONEY far cheaper than of those outside sellers and ON DUTY FREE airport duty-free. 4. If Block Roster is implemented, Oman Air The following ideas could move Oman Air a bit up in will have excessive crew, there shall be many duty free program. crew who will be happy to work in duty-free 1. To allow passengers to pre-order products dur- storage for preparing duty free carts, ad- ing booking process. vantage here is these crew are already in pay- 2. To remove alcohol and cigarette onboard as they roll. are bulky and heavy and on top of that they are very cheap in pricing. Think of a space used by HOW OMAN AIR WILL GUARANTEE cigarette bundle could take 5 perfumes or watch- SELLS? es where the value of course is incomparable. All business are done with some tricks, there 3. The promotion ideas will save Oman air money is no harm to try some here as well. Once from 2 different fronts, Sindbad discounts and we are back flying, we can use duty free as a CD commissions. Oman Air will make maximum promotion for F/C and B/C. of course on face profit. value. If a passenger buys a F/C ticket get this much money in duty free value and if a 4. Duty free catalog should be full of advertise- passenger buys B/C ticket gets this much ments, those advertisement should be enough to return the cost of printing at least. money in duty fre value. But in reality the 5. Oman air should have many products as possi- cost of duty free products is already added in ble so to give passengers real choices. tickets. 6. Prices should be jaw dropping, passengers must Human behaviors shows, once a passenger be told the truth that our prices are very low be- got his free item, he could be tempted to buy cause we buy direct from manufacturers, so we a bit more as we are forcing all passengers share profit with you. to open our duty free catalogs page by page. If the price quoted is reasonable these pas- sengers will end up buying a bit more.

SUGGESTION TO OPEN OMAN AIR DUTY FREE AT MUSCAT Another money making opportunity was easily Products overlooked. Airport duty free is one of the 24 Most of the major fragrance brands have their own hours money making machines. line of other products such as after shave lotion. Oman Air as a national carrier should have Body lotions, shower gel, shampoo, scrubs, soaps easy way with OMAC when it comes the ideal and more. of starting Oman Air duty free in Muscat Inter- national Airport. Hugo boss Hugo boss shower gel after shave Having a duty free space in the airport, Oman balm Air could now sell whatever was not possible to sell onboard. Again Oman Air will buy directly from manufac- Hugo boss Hugo boss per- turers and main wholesalers for that all products age defense fumed body could be sold at very reasonable prices. eye gel lotion Since we know the actual demographic of our The most expensive products of the above is about passengers and other passengers transiting in 2.500 OMR Muscat, it become so easy to be different from the competitors. AIRPORT DUTY FREE REQUIRES MANY STAFF. Oman Air has an upper hand when it comes Relojes Hombre 2019 LIGE Business Quartz Watch to staff. If Block Roster is implemented, many Men Stainless Steel Waterproof Automatic Date of the extra crew will be happy to be a part of Clock Fashion Military Men's Watches, we can buy Airport Duty Free staff. These staff are al- them for as low as 8.500 OMR ready in Oman air payroll, so it is easy for Oman Air.

Jet fuel supplier The jet fuel infrastructure Muscat International airport is equipped with state-of-the-art Jet Fuel facilities to ensure the delivery of safe, top-notch services to clients. The fueling/defueling services range from the smallest to the largest aircrafts. The Airport also applies a strict monitoring policy to control fueling procedure throughout. Strict procedure are also applied in the receiving, storage and distribution cycle within pipelines, intermediate ground located terminals at ramp into-plane services. Unfortunately, the Jet Fuel is supplied by various companies which increases the overhead cost to Oman Air. One of the ways Oman Air could save potential huge money is by being the JET FUEL supplier. I know many people might think that Oman Air is not oil companies, it is true. It is also true that Oman Air is a cash trapped airline just like every other existing airline at this time. This is a huge undertaking of course but it is highly rewarding plus Oman Air could partner Oman Aviation Group. In order to get the proposal to move forward, the blessing from HM is required. But the brain available in Oman Air and Oman Aviation Management, it is possible to send jaw dropping proposition to HM for his approval. WHY THIS IDEA IS NEEDED AFTER HOW WILL IT WORK? CORONO PENDAMIC? Oman Air and Oman Aviation Group could make a JV on this project. Oman Aviation Group will send Oman Air pays premium to the Jet Fuel sup- proposal to HM. pliers even in Muscat home base. Every pos- If the proposal get go ahead, Oman Air could share sible saving could mean a lot to Oman Air, the cost involved with Oman aviation. Banks are al- especially post corona days. The Huge mon- ways ready to support any project like that which ey which was regularly spent could be saved. has guaranteed RoI. Oman Air need that money for sure. Fuel bowsers could be put in use again if Old termi- Besides, saving on jet fuel purchase, Oman nal is used for Technical Landings. Air could make a new stream of revenue by selling jet fuel to airlines landing in MCT.

TECHINCAL LANDING Technical Landing can be described as a planned Aircraft landing where passengers and cargo are not offloaded. The Airports Authority of Oman, which is man- aging all airports in the Country is benefiting from the collecting charges from the overhead international flights in Oman Airspace, known as Air Services Charges. That is good news, but more could be done in order to generate more income. Muscat International Airport is situated at a very strategic location. It the gateway be- tween south and north hemisphere. 1. If OMAC will agree to reduce landing fees a bit as Many of the non network carriers such as car- an incentive. Many cargo and tourists airlines will go and tourists aircrafts are passing overhead land in Muscat for Muscat Airspace daily. The concerned airlines 2. If Handling charges could be reduced a bit for could be even happier to land in Muscat if Technical landing aircrafts, conditions are friendly just to refuel their air- crafts and continue with their intended trips. 3. If the proposal of being Jet Fuel supplier, Oman Aviation or Oman Air will reduce a bit the Jet Fuel WHAT BENEFITS WILL BE MADE AVAILA- prices for Technical Landing Aircrafts as incentive. BLE BY TACHNICALLANDINGS 1 Oman Air will benefit by offering third party OLD TERMINAL engineering services for the landed aircrafts. Oman Air engineers will sign for those flights. The best advantage available so far is the Old Ter- minal being not in use. In normal days all the park- 2 Landing charges will be collected from the ing bays are also empty. Therefore, there is one clients. whole terminal ready to use for technical landings. 3 Handling charges will be another opportuni- ty of making extra money 4 Fuel sold to those aircrafts will be another business to count on. HOW TECHNICALLANDINGS WILL WORK OUT There are three main ways which could make a huge difference and attracts potential cli- ents.

International cargo hub Muscat International Airport has a huge land Is the cargo business feasible? which is not in use for the time being. The land available is the best asset ever which I don’t want to put my words here but Reuters says could bring in hundreds of millions of OMR “Chinese retailer Alibaba Group Holding Ltd’s sales annually. for its 24-hour Singles’ Day shopping blitz hit a rec- ord $38.4 billion, more than U.S. rival Amazon.com Taking consideration that the world has offi- Inc’s haul last quarter from online store sales “ that cially entered into online shopping to the point sales was on Nov 11 2019. (https:// that online sales surpassed offline retail by far. www.reuters.com/article/us-singles-day-alibaba- Muscat International Airport is central located sales/alibabas-singles-day-sales-hit-record-38-billion globally. If we take 8 hrs. radius, flights can -growth-slows-idUSKBN1XK0HD ) reach all over Europe and almost all of Africa. It is a fact that Most of the exporting and importing Opening up Muscat International airport as an countries can’t sustain their own air cargo facilities. International Cargo Hub would enhance world Think about all landlocked countries in Africa and delivery system and realize the dream of Mr East Europe and Eurasia. Think about Bangladesh, Jack Ma founder and former CEO/Chairman Indonesia, Vietnam with massive exports. Muscat International Airport could play very significant role. of Alibaba, 3 days from orders to delivery worldwide. Muscat could play huge role. HOW OMAN AVIATION GROUP & OMAN AIR BUSINESS SPACE WILL BENEFIT FROM THE CARGO HUB Muscat International Airport has enough land 1 Landing fees This June 18, Alibaba to build facilities to handle more than 1 million 2 Handling fees and JD.com sold a stag- Tons of cargo monthly. gering 136 Billions .says 3 Cargo handling fees Finance.Yahoo.com It is a known fact that daily cargo moving just between Africa, Europe and Far East is in 4 Engineering Services enormous numbers enough to make Muscat 5 If Oman Aviation & Oman Air manage to be the International airport busier with cargo than sole jet supplier in Muscat. The fuel sales will make passengers. huge difference in Oman Air books. This suggestion could bring great opportunity 6 Thousands of staff will be required to handle for Oman air, Oman Aviation Group and smoothly the massive operations of cargo, that Oman as a country. means more Omanis will be employed. This is Dubai Fresh Flowers Terminal. If Dubai International airport can position itself as In- ternational Hub for fresh flow- ers, why cant Muscat Interna- tional Airport position itself as International General Cargo Hub?

Economic growth and globalization drive air cargo demand. Today, air cargo retains its vital role in economic expansion, with emphasis on developing markets. As a trade facilitator, air cargo increas- es the global reach of businesses, allowing them to bring goods and products to distant markets in a more cost-effective and faster way. 2017 was an exceptional rebound year for air cargo perfor- mance, resulting from improved global economic conditions, world trade and increased import and export activity. Over the past two decades, the annual average growth rate of Freight Ton Kilometer (FTK) was 4.1% while Mail Ton Kilometer (MTK) was 4.05%. In terms of freight tons, there was a growth of 9.8 per cent, with a total load of 37.0 million tons dur- ing 2017, while there were 33.7 million tons loaded in 2016. In 2017, demand (FTKs) grew 10.4 per cent, totaling 194.3 billion https://www.icao.int/sustainability/economic-policy/PublishingImages/Pages/Facts-and-Figures/Download%20full% 20document.pdf Many of the landlocked countries in Africa, OMAN AIR FRIEGHTER East Europe, Near East countries, Eurasian The success of Muscat International Airport as countries, West Europe and even MEA will a international Cargo Hub will bring about the highly benefit from Muscat International Airport existence of the very needed Oman Air Freight- Cargo Hub facilities. er. Due to COVID19, many airlines faces toughest Freighter is a business wing which will bring time ever including filing for bankruptcy, it can’t Oman Air into another level. Oman Air will be never happen better time for Muscat Interna- able to generate positive cash flow. tional Airport to open as international cargo Freighter wing will create value on top of pas- hub as now. senger flights. Share of International Freight Tonnage by region, 2017 Continent Percentage Tonnage Africa 2.1% 777,000 Tons Midle east 15.8% 8,846,000 Tons Europe 25.9% 9,583,000 Tons Asia & Pacific 39.6% 14,430,000 Tons What des it cost to build warehouses for cargo? Prefabricated steel structures in China cost between 400 and 600 USD per Ton. Of course the sys- tem is not cheap but it worth perusing it as the economic value that it brings with it is of highest im- portance.