SATS and Oman Air form cargo handling joint venture in Muscat

SATS, the Singapore ground handling company, has signed a joint venture agreement with Oman Air for cargo handling at Muscat International Airport.  

Oman Air will transfer its cargo handling business and related assets to its wholly-owned subsidiary, Oman Air Cargo.
SATS will acquire 165,000 shares in the subsidiary from Oman Air, representing 33% of its share capital, at a purchase consideration of approximately S$22.4m.
The joint venture company will then be renamed Oman SATS Cargo and is expected to commence operations during the second quarter of 2016.
It will become the single source provider of cargo handling services, first at the existing cargo facility and then at the new cargo terminal in Muscat International Airport, which handled 134,000 tonnes in 2015, a 10.2% increase on prior year.
SATS will provide "the requisite management and technical know-how" to the joint venture including staff training as well as reviewing existing cargo processes and operations work flow at the new cargo terminal in Muscat.
Paul Gregorowitsch, Oman Air’s chief executive, 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.
“With SATS as our partner, we also believe that the subsequent growth of the new company will result in increased employment and career development opportunities for Omani citizens”. 
Alex Hungate, SATS’ president and chief executive, said: “This strategic partnership with Oman Air will enhance connectivity for our cargo customers across Asia and strengthen Oman’s position as a transit hub.
“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.”
The completion of the SATS acquisition is “subject to the fulfillment of certain conditions precedent” said the two partners.
Muscat has benefited from the alliance between European freighter operator Cargolux and Oman Air who expanded their partnership in February with the addition of two weekly flights to Mumbai.
The two carriers launched their partnership in April last year, which provided Cargolux with access to the Middle East airline’s facilities in Muscat, Salalah and Sohar. Later, the two partners added flights to Chennai.