Oman Air resumed a full schedule of flights again yesterday after a number of pilots went on strike last week.
In the second instance of employee unrest this year, the national flag carrier suffered delays across a number of flights on Friday as pilots failed to turn up to work.
A flight to Munich was cancelled and passengers were given food and accommodation until the following morning when the flight was rescheduled.
The airline said the pilots had demanded an increase in housing allowances, which has now been approved.
"Demands have now been addressed, finalised and communicated to the pilots. This has unfortunately meant that certain flights were disrupted," a company spokesman said.
About 200 Oman Air employees went on strike in March demanding higher pay, just as the rest of the country witnessed civil unrest over employment and living conditions.
Some of the airline's staff salaries were increased, as well as a number of allowances, which the company said would contribute to it running a loss until 2014 on the back of higher operational costs.
Continued strikes could further jeopardise the airline's restructuring and recovery plan that is under way and which outlines a return to break-even by 2014. The plan focuses on enhancing the carrier's foothold in its domestic market and serving business and tourism bound for Oman.
The long-haul market is already saturated in the Middle East by the Gulf's big three carriers, Emirates Airline, Qatar Airways and Etihad Airways.
Having pressed the airline's board to implement the recovery plan, Peter Hill, the chief executive of Oman Air, is expected to retire next month.
The company is conducting a global search for a successor.
Oman Air posted an operational loss of 78 million rials (Dh745m) last year as a result of major investments in infrastructure and the airline's fleet.
From 2009 to 2018, a total of 14 wide-bodied aircraft, including the Airbus A330 and Boeing 787 Dreamliner, will be introduced into the fleet.
The airline hopes its break-even target of 2014 will coincide with new aircraft and further routes becoming established in its international network, as well as an increasing number of tourists visiting the sultanate.