NICHOLAS IONIDES / SINGAPORE
But Royal Air Cambodge successor faces competition from Australian-backed start-up
A new national airline for Cambodia being set up by China's Hainan Airlines and the Phnom Penh government has come a step closer after the Civil Aviation Administration of China (CAAC) approved the venture.
Fast-growing Hainan announced plans for the carrier early this year, saying Chinese regulatory approval was needed for its first foreign foray.
Jimmy Guo, the Hainan executive leading the project, says obtaining Chinese approval has taken longer than expected, but a final go-ahead is near after the CAAC gave its backing to the venture. The final Chinese approvals are expected this month from the State Development Planning Commission.
Guo says the new carrier, Air Cambodia, will then need to be registered as a company in the country, after which 60 days must pass before operations can begin.
Two Boeing 737-400s will initially be wet-leased from Hainan. Guo says expansion depends on the Cambodian government securing new bilateral air agreements.
"There are not enough bilaterals between Cambodia and other countries to support more than two 737s," he says.
Services are planned domestically between the capital Phnom Penh and the fast-growing tourist city of Siem Reap, as well as internationally from Siem Reap to Bangkok in Thailand, and from Phnom Penh to Singapore, Kuala Lumpur, Hong Kong, Guangzhou, Ho Chi Minh City and Taipei.
Hainan announced in February that it had agreed a deal with the Cambodian government to establish jointly the new Cambodian national airline, saying at the time that it would take a 49% stake for $4.9 million. The Cambodian government will hold 41% while a company identified as Cambodia CTG will take 10%.
Air Cambodia aims to fill the void in the market left by the October collapse of national carrier Royal Air Cambodge, which was a joint venture between Malaysian company Naluri and the Cambodian government.
It is facing a challenge from another Cambodian start-up, Mekong Airlines, which is backed by a group of Australian industry veterans. Mekong says it has already secured international traffic rights out of the country, allowing for a launch next month, using Airbus A320s and ATR 42s.
Mekong plans to operate on the same routes that Air Cambodia has identified, but Guo believes that there is not enough room in the market for two new international airlines.
He does not comment specifically on Mekong, but says: "The partner in our project is the Royal Government of Cambodia and they make the final decision as to who gets the traffic rights."
Source: Flight International
