To launch AirAsia Cambodia, Malaysia-based AirAsia Group and Cambodian investor Sivilai Asia have signed a three way partnership (JV) agreement.
The LCC giant warned that this could only occur if Cambodian aviation authorities cut airport fees and fuel taxes. LCC intends to hold as many as 6 million passengers a yr to Cambodia through its vast network of routes in Southeast Asia.
The remaining shares can be taken over by Sivilai, leaving 51% of AirAsia. The two are expected to make an initial direct investment of $5 million. The airline is predicted to begin operations within the second half of 2023, subject to regulatory approvals and receipt of an Air Operator Certificate (AOC).
The group’s portfolio will now include AirAsia Cambodia, in addition to AirAsia Malaysia, AirAsia Indonesia, AirAsia Thailand and AirAsia Philippines.
AirAsia Malaysia operates five routes between Kuala Lumpur (KUL) and the Cambodian cities of Siem Reap (REP) and Phnom Penh (PNH). The first Penang (PEN)-PNH flight will depart on January 3, 2023. From Bangkok (BKK), AirAsia Thailand offers flights to REP and PNH.
The latest carrier will strengthen AirAsia’s repute in Cambodia and Indochina and provides the corporate greater access to the domestic market in addition to international markets in Southeast Asia, North Asia and other regions.
By opening additional routes, creating jobs and introducing a very low-cost airline, AirAsia Cambodia hopes to further develop Cambodia’s aviation and tourism sectors.
Capital A CEO Tony Fernandes said: “The value of the AirAsia network is an unbeatable asset; it will be another flag providing wide connections in Cambodia and the region, namely China, India and North Asia. 2022 was about restarting our airline to pre-pandemic levels. This machine is now ready and will be completed by the second quarter of 2023. In the second half of 2023, we will focus on further growth efforts.”
Sivilai Asia director Vissoth Nam added: “As one of the first countries to open quarantine-free international travel in November 2021, Cambodia is leading the way in the recovery of air travel (in Southeast Asia) from the Covid pandemic, thanks to the rest of the countries in region has followed suit.”
“The increase in connectivity, combined with the best prices, will certainly stimulate demand for air travel among the population due to a greater choice of airlines and destinations. This will open doors for students going abroad, support business travel, strengthen trade ties and provide a welcome boost to the development of new small and medium-sized enterprises.”
According to Fernandes, inside three years AirAsia Cambodia could add 6 million annual tourists by opening latest routes from the country to locations in Southeast Asia, North Asia and India.
He said Cambodia is an underserved and poorly connected market on account of low airline flight frequencies. However, he urged the Cambodian government to cut back high gasoline prices and airport fees, and abolish the visa-on-arrival requirement.
According to Fernandes, the typical airport tax in Cambodia is about 40% higher than other Southeast Asian countries.
Source: RoutesOnline.com, ttgasia.com
