Oman Airports Management Company: Expansion of Salalah and Muscat Airports Terminals

Oman Airports Management Company: Expansion of Salalah and Muscat Airports Terminals

Abstract

Due to the increased economies, most people are opting for air transport over other modes of transportation due to its convenience. The increased number of passengers using air transport has led to congestion in the airport terminals. To reduce the congestion, there is need for the expansion of these terminals so as to accommodate the high number of passenger. However, the development of airport terminals is not an easy task due to relating challenges such as lack of space for expansion, economic constraints, and environmental issues. All the same, with proper planning and using the other methods of reducing congestion such as technology, it is possible to cope with the rising number of passengers at a minimum cost. This report is about the study that was carried out on the problems  Oman Airports Management Company is facing in its bid to expand the Salalah and Muscat airport terminals.

1.0 Introduction

Oman Airports Management Company is a government-owned organization. OAMC has been given the mandate to run Salalah and Muscat airports. The company is in charge of facilities, customer services, capacity, marketing, and communications. It also provides aid in the control of finances and revenue collection. Of later, there has been an influx of air passengers, which seems to overwhelm the existing capabilities and capacities of the two airports terminals. OAMC has already forwarded a proposal to manage the expansion of Salalah and Muscat terminals.  From the plan, it is evident that the development of the airport’s terminals will raise several problems that need to be addressed before embarking on the project.

2.0 Results and Findings

The rising number of air passengers has brought congestion at Salalah and Muscat airports. To relieve the obstructions, there is a need for the Oman Airports Management Company to embark on the expansion project. However, there are problems associated with the expansion project. These problems can be analyzed and tackled in different ways, as discussed below.

2.1Marketing

With technological development, marketing strategies for business organizations have changed. Traditionally, the focus of business enterprises was on production and sales. The shift has now changed to customer-oriented marketing schemes (Albers et al., 2017). The changes in communication patterns bring this shift, a variation of the customer wants, and desire to develop. The primary goal of a business enterprise is to acquire and keep customers. Competition has increased, which has done businesses to realize the need for CRM.

The case is no different for OAMC. To take care of its soring numbers of customers, OAMC needs to think of to expand the terminals so that it accommodates the significant amount of passengers. The movement of passengers in and out of the country is high. Even if the cost of expansion is high, OAMC has to move with haste to expand the terminals. The company has to bear the high cost of hiring engineering and architectural services. The company has two strategies which it can utilise to cater for the vast number of customers. First, they can expand the terminals or build new airports. Either way, the two options are expensive and hence the need to sit down and conduct a project analysis.

2.2 People

Physical expansion of the airport terminal may not be an effective way of dealing with the increasing number of air passengers. Development of the terminals will require a big piece of land which the airport does not have. To acquire this amount of area, it will mean relocating people who live near the airport to free the land. Relocating people comes with a financial cost. It will also bring misunderstanding between the people and the airport’s authority.

Expanding the airport terminal towards the residential area will also endanger the lives of people (McCrie, 2015). The forceful eviction of people has been criticized and is not being taken lightly by some people.  To overcome this challenge, the government can come up with other alternative solutions for reducing congestion. One that the company can overcome the problem of congestion is by investing in the technical skills of its staff members. The staff should be trained on how to handle great multitudes of people booking flights. The use of technology can enable workers to work faster and efficiently.

The poor service at the Salalah and Muscat is making potential customers go to other airports like Sohar and Duqm airports, which offer better services (Albers et al., 2017). OAMC has very trained employees who are not sufficient to deal with the soaring number of customers. OAMC should come up with strategies of training its employees to cater to the significant amounts of the customers. Losing customers will have a negative effect on the business. OAMC may risk closure of some routes due to bad customer service.  The company should also hasten its expansion plan before imp le mentation of additional government policies. Government policies like the protection of people near the runaways. Such systems can affect the implementation of the expansion plan. OAMC should hasten its procedure to expansion strategy before it is too late.

2.3 Financial Aspect

The financial aspect of the expansion of the terminal can be looked at in two ways. One way is looking at the finances with a view of the expected income that the airport will bring after expansion. The other way is assessing the financial cost of the project. After the development of the Salalah and Muscat airport terminal, the number of clients using the airport is expected to get higher. Increased number of customers will lead to an increase in the revenue generated by the airport. The expected d revenue is a guiding factor as to why the terminal needs to be an extension of the airport (Dalal & Meeker, 2012).

On the other hand, the expansion of the airport has come with a cost. The area of development is occupied by people who need to be moved to pave the way for the extension. Relocating people has a financial implication to the company since the relocation costs have to be shouldered by the company.

The Salalah and Muscat airport is not easily accessible because they are found at the outcasts of the city. The area is characterised by poor road network. The roads connecting the city to the airport are impassable. OAMC should include in their budget the amount that they will require to renovate the streets. Renovating or creating ways to assess the airport is outside the scope of the project. It also brings additional costs to the project. Investing in right roads cannot be overlooked since people using the air transport need to connect to airport using ways. The good road network will bring more customers and hence more revenue

2.4 Effect on the environment

The expansion of the airport has led to various environmental effects. Development of the terminals produces noise which comes from the machine’s use (Tomová, 2009).  People living in the surrounding area of the airport will also be affected by the noise from the airport. Apart from noise pollution, the airport expansion will also affect the green environment. The trees will be cut down to pave the way for development. The dust and smoke that will be released will affect the health of the people. Due to the environmental implication that the project will have on the environment, there is a possibility of an organizational group coming up with policies that may hinder the development of the project.

To avoid all this conflict, the government can recommend the use of alternative modes of transport. The government can enhance the road network facility so that more people can use the roads instead of using air.  Another alternative is to look for another place to relocate the airport terminals. The airport should be constructed out of town away from the residential areas. There are vast areas of the city that are suitable for the construction of airports. There will be enough space for runaways and future expansion projects. The fields are also away from people so people will not be affected much by environmental pollution.

2.5 Strategies

As a way for finding solutions for the above problems, the government is coming up with other modes of expanding the airports. The government is investing in technology where the airplanes are fitted with a technology battery to enable it to travel faster. Purchasing high-speed airplanes will significantly reduce the amount of time spent in one trip. Reducing the time will help in reducing congestion in airports.  Already there is a model of an airplane that is fitted with a technological engine that is using less time to ferry the passengers. The model airplane is called   Accelerating Electrification of Flight (ACCEL) by Rolls Royce Company (Kordalipoor et al., 2015).  It is fitted with an electric engine that makes sit to move at high speed.

The other strategy is building the airport in sparsely populated away from the already congested city. Another approach is expanding the capacity of the airports by adding more runaways. The Frankfurt Airport and Heathrow airport have already adopted the approach. More runaways have been added, which has reduced congestion in the airport. The Oman Airports Management Company should assess the strategy at hand and decide which plan suits them best. The validity of a project should be long term since the customers’ needs are changing daily.  The approach that OAMC takes today should be viable for several years to come. There will be no need of making adjustments that will not cater for the demand of customers in a couple of years to come.

2.6 Project and Operations Management

One significant aspect of project management is project procurement. Procurement refers to the procedures of buying goods and services that are required for the project from outside sources. T In procurement, the supplier has to sign collaborative contracts as an assurance that the services and products purchased are delivered on time. Before any acquisition is made, planning is done to ensure that there is no wastage of resources. Procurement is done according to the budget of the project. In our case, OAMC Company must look at their objectives and goals. From the purposes, the project manager should come up with the budget. It is from the budget that procurement is done. The first step in the acquisition is identifying the suppliers (Porter-Roth, 2002). The company communicates with the supplier what they want to be delivered. The supplier gives a quotation, and if the company is satisfied with the prices, the process continues. Project management is a continuous process that involves several things that need to be coordinated. Coordination and communication in project management are essential for the successful completion of the project.

3.0 Summary and Conclusions

What is coming out of the above discussion is that there is a need for the OAMC to undertake the expansion project. To remain competitive in business, OAMC must move with hast to expand the terminals so that they don’t lose their customers to their competitors. There are several options that OAMC can utilise for expansion. OAMC can decide on expanding the runaways, constructing a new airport, or investing in technology. Whatever move the company will take will come at a cost. Although expanding the airport services is a costly affair, the returns are high. If OAMC does not move fast, they are likely to lose their customers to their competitors. It will be tough to win them back and also to win their loyalty.  Already the customers have started moving to Frankfurt and Heathrow airports, which offers quality services. Wining back such customers will not be comfortable for OAMC. The best thing the AOMC should do is to make sure that it retains its customers by expanding in the airport services.