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Airport Free Zones to create new economic growth engines for Oman

Mucat Airport
Mucat Airport

Catalysing growth: Strong boost for air cargo throughput in line with National Air Cargo Strategy 2030

A trio of Airport Free Zones, announced by Royal Decree last week, has the potential to unlock new economic opportunities for the Sultanate of Oman, leveraging the country’s world-class airport infrastructure, modern air cargo and logistics capabilities, and enhanced air connectivity with regional and international markets.

The new free zone developments, planned in the close vicinity of Muscat, Suhar and Salalah airports, will also serve as an important enabler in achieving the objectives of the government’s National Air Cargo 2030 Strategy, say experts.

First unveiled in 2020, the strategy seeks to boost air cargo throughput in the Sultanate of Oman to 730,000 tons by 2030 – a goal designed to also harness opportunities for, among other things, employment generation, economic diversification, and SME development. It also envisions, among things, the development of airport cities to serve as business hubs around key airports in the country.

The concept of Airport Free Zones anchored by large Airport City developments was first deliberated upon during the Logistics Lab of the National Programme for Enhancing Economic Diversification (Tanfeedh) held during 2018. The goal was to support the Sultanate of Oman’s ambition to evolve into a major hub for air cargo and logistics in the region.

Before the pandemic stalled or upended a number of economic initiatives under early implementation, Airport Cities were mooted at Muscat, Suhar and Salalah. According to plans outlined then, each Airport City was envisioned to feature five clusters focusing on commerce, hospitality, logistics, free zone activities, and aviation-centric investments. Together, they made for an integrated urban development.

The biggest of these was planned in the vicinity of Muscat International Airport. Covering an area of over 350 hectares, the proposed Muscat Airport City was envisaged to feature five different clusters each dedicated to a specific set of economic activities.

Around 152 hectares was initially allocated for the free zone development with a focus on investments related to light industry, warehousing and storage of airfreight, e-commerce activities, handling and repairs of aviation related goods and equipment, and an integrated service delivery station.

With the promulgation of a new legislation framework governing the introduction of airport free zones for the first time in the Sultanate of Oman, the country’s three key airports will anchor new economic developments similar to how seaports anchor adjoining free zones or special economic zones. They promise to herald the growth of a new economic sector around airports, air cargo, e-commerce, sea-to-air logistics, and aeronautical services, among other activities.

(Picture for illustration only)

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