AirAsia expects to launch operations of a new joint-venture airline in Cambodia in late 2023. The Malaysian low-cost airline Group, which is part of Capital A, has signed a joint-venture agreement with Cambodia’s Sivilai Asia on December 9. AirAsia Cambodia confident of strong market opportunities.
AirAsia has been active in Cambodia since 2005 and currently operates 49 flights a week to the country. Capital A CEO Tony Fernandes said that the creation of a separate business unit will offer new opportunities: “Cambodia is the fifth ASEAN country where we are continuing our march of being the region’s number one mover of people and cargo, and providing a linchpin of economic growth for ASEAN countries. (…) As Cambodia is a market that is familiar to us and where we have deep infrastructure in place. That’s why all our future airlines will be based in ASEAN. As this is an area we know well and can derive quick profitability and connect our very large network to the main points of Cambodia, namely Phnom Penh, Siem Reap and Sihanoukville.”
Fernandes said that AirAsia Aviation Group Limited (AAAGL) will acquire a 51 percent share in AirAsia Cambodia, while Sivilai Asia will have the remaining 49 percent. The Cambodian company led by Vissoth Nam is known for various restaurants and bars in the country. Nam, who will become the CEO of the new airline, hopes that it will benefit from the strong demand for traveling that will boost tourism.
Nam said in the media statement: “As one of the first countries to open up international travel with no quarantine in November 2021, Cambodia has led the way in ASEAN’s air travel recovery journey post-Covid, with the rest of countries in the region following suit. Today, we are proud to be the catalyst for a new low-cost airline operating from Cambodia. An increase in connectivity alongside best-value fares will certainly stimulate demand for air travel amongst the population due to increased airline and destination choices. This will open the doors for students traveling abroad, supporting work-related travel, boosting trade ties, and providing a welcome boost for the growth of new small and medium enterprises.”
AirAsia Aviation Group CEO Bo Lingam called the new Cambodian airline “a natural step for the Group as AAAGL is the largest foreign airline and the second largest airline group overall operating into Cambodia in terms of capacity. Pre-pandemic, AirAsia operated 90 weekly flights from Malaysia and Thailand and is currently flying about 49 weekly flights to Cambodia.”
AirAsia Cambodia will be the fifth airline within AAAGL. It still needs regulatory approval, but Fernandes is confident this will be granted without problems. He expects the carrier to be profitable in its first year when it launches with four Airbus A321s that are coming from the AirAsia Aviation Group.
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.