Conceptualisation of Air Cargo Sector Development to Enhance the Success of Oman’s Logistics Vision 2040

Abstract

In recent years, the government of the Sultanate of Oman has recognised the need to diversify its economy and lower its reliance on oil, which makes up approximately 85% of government revenue. As a result, a number of developmental plans have been drafted to shift the nation to a non-oil-based economy, including ‘The Sultanate of Oman Logistics Strategy 2040’ (SOLS 2040), a plan intended to transform Oman into a world top-ten logistics centre by 2040.

A review of the literature shows that, as part of the logistics sector, the air cargo industry exhibits positive performance and trends, particularly in the Middle East, which is considered a transit point for air cargo between Asia, Africa, and Europe. The region generates approximately one-third of the total air cargo tonnage in the world, and industry experts estimate that the global air cargo industry is expected to more than double in the upcoming fifteen years. Experts also recognise that Oman’s geographical location and its geopolitical position present significant opportunities for growth in the air cargo market. However, despite these forecasts, Oman’s air cargo sector received very little attention in SOLS 2040.

Therefore, this study aimed to conceptualise the developmental direction of Oman’s air cargo sector to promote revenue generation, increase market share in the global and Middle Eastern air cargo markets, and show how enhancing this area as part of the logistics sector can help the country achieve the goals of SOLS 2040.

The study employed an exploratory, sequential mixed method research design: (1) an exploration phase to identify air cargo development strategies which need to be established to improve the air cargo sector in Oman, and (2) a confirmation phase to
confirm strategies identified in the first phase. In the exploration phase, a case study was applied, and interview questions were developed. Extensive data was then gathered from two organisations, Oman Aviation Group and ASYAD Group. A total of eighteen air cargo experts from different departments and companies handling air cargo gave in-depth interviews. This produced a holistic opinion about the required strategies to develop Oman’s air cargo sector. The findings from the first phase were then analysed and used to develop a quantitative instrument (questionnaire) for collecting data in the second phase. From a targeted study population of 258 participants, 205 respondents submitted questionnaires, representing a response rate of 79.5%. This quantitative data was analysed, and strategies were confirmed.

In the first (qualitative) phase of research, eight main themes were extracted. In the second (quantitative) phase of research, six out of eight of air cargo sector development strategies were confirmed as having the potential to significantly and positively influence the development of Oman’s air cargo sector: stimulating air cargo demand, establishing free trade zones, adopting a sea-to-air transportation hub, strong coordination between air cargo stakeholders, improving customs and government agencies, and the development of specialised infrastructures. Two other strategies, establishing a bonded warehouse and promotion and marketing, were not shown to significantly influence Oman’s air cargo sector development (see Appendix H Summary Study Diagram).

The study recommended that the air cargo sector of Oman should strive to build its capacity and capabilities to attract clients from all over the globe, thus gaining the benefits of increased international imports and exports and a secure market share from the region. Additionally, the study advised forming an independent department to manage the air cargo sector from a strategic point of view because, in the current situation, there is no ownership regarding air cargo sector development. An autonomous department would be responsible for prioritising the identified strategies in this study, implementing them, and selecting the right business models for air cargo development in Oman. This would consist of identifying the strengths and weaknesses of the regional market, coordinating with government agencies, developing required air cargo facilities, recognising how to attract air transporters, and supporting industries required for air cargo. Sector development would also include an extensive business growth plan to determine target customers and achieve the overall goals.

The study contributes to professional practice by providing empirical evidence for conceptualising the Oman air cargo sector’s future development strategies to achieve success in SOLS 2040 and enhance Oman's logistical footprint in the region.
Implementing the identified strategies will secure greater market share from the growing air cargo trade in the global and Middle East markets.

From a theoretical and academic knowledge perspective, the study’s findings contribute by opening new horizons in the air cargo sector and making contributions to the existing body of knowledge and theories concerning development strategies as there are no past studies that have explicitly focused on Oman’s air cargo to enhance logistics in Oman. Also, with the exception a study by Chang et al. (2007) in Taiwan, no studies on other places in the world concerning the air cargo sector development have been identified. Future researchers will apply and generalise the empirical results for exploring and explaining different associated air cargo sectors. The present study generated a conceptual model to develop the air cargo sector; future researchers can take it further to develop new theories.

Thus, the substantial findings of the study have built a logical bridge between the theoretical and practical knowledge in the field of air cargo sector development. These findings will extend the body of knowledge and uplift the level of understanding for future researchers and practitioners, who may use them to further investigate and explain various related phenomena. Therefore, this study will contribute to academic knowledge in the field of investigation.

Date of Award	Oct 2022
Original language	English
Supervisor	Amin Hosseinian Far (Supervisor), Andrew Gough (Supervisor) & Timothy Campbell (Supervisor)