AirAsia to Create Cambodian Joint Venture

DALLAS - Capital A, formerly known as the AirAsia Group, has announced that via its aviation unit, AirAsia Aviation Group (AAAGL), it will create a joint venture with hospitality group Sivilai Asia to launch a new airline, AirAsia Cambodia.

Speaking of the venture, Capital A said, "AirAsia Cambodia aspires to be the largest airline in Cambodia.

"AirAsia Cambodia plans to operate mostly to AAAGL's existing stations within the four-hour radius from Cambodia to leverage scale and brand presence while minimising setup costs. AirAsia Cambodia will increase Cambodia's network offerings by launching new services to Asian destinations lacking connectivity from Cambodia today, which will help diversify Cambodia's network connectivity and create more links within the region and beyond."

AirAsia Airbus A321neo (9M-VAA). Photo: Ratchapon Pipitsombat/Airways.

Aviation in Cambodia

Capital A will be AirAsia Cambodia's majority shareholder with 51% after investing US$2.55m. Sivilai Asia will front US$2.45m and hold the remaining 49%. The airline was established following a feasibility study that found Cambodia to be Southeast Asia's eighth-largest aviation market, which, before the pandemic, was enjoying strong economic growth.

Aviation in Cambodia is currently dominated by the country's largest carrier Cambodia Airways (KR), which operates a fleet of three Airbus A319s and three A320 aircraft. It operates eight international and domestic routes from its PNH hub.

Cambodia Airways Airbus A319. Photo: Cambodia Airways.

2023 Launch

The companies are planning a launch for the second half of 2023, subject to regulatory approvals. Two aircraft will be used initially, likely the A321neo, with plans to grow to 15 airframes.

No specific routes have been disclosed, but the airline has said its primary focus will be on connecting Phnom Penh (PNH), Siem Reap (REP), and Sihanoukville (KOS) with existing points across the AAAGL network. It also plans to offer routes to China, India and North Asia.

AAAGL is made up of AirAsia (AK), AirAsia X (D7), Thai AirAsia (FD), Thai AirAisiaX (XJ), Indonesia AirAsia (QZ) and Philippines AirAsia (Z2).

Featured Image: AirAsia Airbus A320. Photo: Wilbert Tana/Airways.