PHNOM PENH – Capital A Bhd aviation arm AirAsia Aviation Group Ltd (AAAGL) and Cambodian-based Sivilai Asia have invested US$25 million (RM110 million) to establish a new low-cost airline.
Known as AirAsia Cambodia, the new airline allows AAAGL to operate in the existing markets where it already has a presence and operations to build scale, and network connectivity to further reduce operating costs.
“AirAsia Cambodia aims to further stimulate the Cambodian aviation and tourism industries, launch new destinations, create jobs and bring a truly low-cost operation to the country,” the company said in a statement released at the joint venture (JV) signing ceremony today.
Capital A chief executive officer Tan Sri Tony Fernandes and Sivilai Asia director Vissoth Nam signed the JV agreement with operations expected to commence in late 2023.
Tony said the year 2022 is about restarting the airline and returning to pre-Covie-19 levels. This is already in place and will be completed by the second quarter of 2023.
“The second half of 2023 will be when we focus on our continued efforts on growth. We are confident of profitability in the first year,” Tony said, adding that Asean is an area the company knows well and can derive quick profitability.
The airline will connect its network to the main points of Cambodia, namely Phnom Penh, Siem Reap and Sihanoukville.
Vissoth Nam said the company is proud to be the catalyst for a new low-cost airline operating from Cambodia.
“This will open the doors for students travelling abroad, supporting work-related travel, boosting trade ties, and providing a welcome boost for the growth of new small and medium enterprises.
Meanwhile, AAAGL group CEO Bo Lingam said setting up a majority-controlled JV in Cambodia is a natural step for the group as AAAGL is the largest foreign airline and the second largest airline group overall operating in Cambodia in terms of capacity. Setting up a JV in Cambodia is in line with their Asean expansion strategy.
“We plan to operate mostly to our existing stations within a four-hour radius of Cambodia. AirAsia Cambodia will increase Cambodia’s network offerings by launching new services to Asean, North Asia and beyond in the future,” he said.
AAAGL operates five routes to Cambodia – Kuala Lumpur (KL)-Siem Reap; KL-Phnom Penh; Penang-Phnom Penh (starting January 3, 2023), Bangkok (Don Mueang)-Siem Reap, and Bangkok-Phnom Penh.
Since entering the Cambodian market in 2005, AirAsia has carried over 10 million guests to and from Cambodia. – Bernama, December 9, 2022
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