Oman Air and the Singapore Airport Terminal Services (Sats) subsidiary Sats Investments formed a joint venture on 2 April to handle cargo at Muscat International airport.

Based on the agreement, Oman Air will transfer its cargo handling business and related assets to wholly owned subsidiary Oman Air Cargo, with Sats acquiring a 33 per cent stake in the subsidiary, according to a local media report.

The joint venture, which is expected to commence operations in the second quarter of 2016, is to be renamed Oman Sats Cargo, and will issue a paid-up share capital worth RO500,000 ($1.3m), comprising ordinary shares worth RO1 each.

Oman Sats Cargo will be the single source provider of cargo handling services at the existing cargo facility and eventually at the new Muscat International airport, where the ongoing expansion is expected to be completed by 2018.

Sats will provide staff training and a review of existing cargo processes and operations work flow at the cargo terminal in Muscat.

According to the company website, Sats handles an estimated 85 per cent of cargo coming through the Singapore Changi airport, provides cargo, mail, express and courier services to airlines operating at Changi airport, and cargo services to some 200 international and local freight forwarders.