Details emerge on new SATS, Oman Air joint venture

Muscat-based Oman Air has agreed to transfer its cargo operations into a new joint venture with SATS Investments Ptd Ltd, the wholly-owned subsidiary of Singapore-based SATS Ltd., and let SATS assume its cargo handling duties at Muscat International Airport under the heading of the newly formed company, Oman SATS Cargo LLC.

As part of the agreement, Oman Air will first spin-off its cargo handling business into a wholly-owned subsidiary, Oman Air Cargo LLC. SATS then plans to acquire 165,000 shares in the subsidiary, equal to a 33 percent stake, at a price of U.S. $16.5 million. Following the investment from SATS, the joint venture will be renamed Oman SATS Cargo LLC.

Oman SATS Cargo will commence operations at Muscat’s existing cargo terminal, during the second quarter of 2016, and in the future at the airport’s new 200,000-tonne-capacity cargo terminal.

Oman Air expects the new joint venture with SATS to ready the airline for future growth through sweeping process improvements. Paul Gregorowitsch, Oman Air’s Chief Executive Officer said “The joint venture with SATS is one of our initiatives intended to prepare for the growth in airline operations in the coming years as well as secure a quality improvement in the services provided to our cargo customers.”

SATS also expects the joint venture to contribute to Muscat’s growing influence as a transit hub for cargo as the company increases global connectivity. Alex Hungate,  President and Chief Executive Officer of  SATS added, “we also see opportunities to develop cold-chain handling capabilities and promote carriage of premium and temperature-controlled airfreight for Oman Air and other airlines”