More Airlines in Cambodia 2017 & 2018

Not too long ago, in May 2017, according to a CAPA report, quoted Cambodia may not be able to support more than 4 local airlines over the long term. Brendan Sobie, chief analyst at CAPA, said despite the impressive growth in recent years of Cambodia’s aviation market, which chalked up around 400,000 annual domestic passengers and 7 million international passengers last year, local carriers could struggle with commercial viability.

“Cambodia has a very limited domestic market, while its other international markets are not growing nearly as fast as China and are extremely competitive,” he said.

“The 4 existing airlines, none of which operate more than 7 aircraft, lack the scale to compete effectively with foreign airlines, and the proposed start-ups will face similar challenges if they succeed at launching services.”

• Cambodia Angkor Air
• Sky Angkor Airlines
• Bassaka Air
• Cambodia Bayon Airlines

At least five new passenger airlines are preparing to launch Cambodia-based operations within the next year, effectively doubling the number of local carriers and raising the level of competition on domestic and international routes.

The new airlines have applied for air operator’s certificates (AOC), with one already receiving approval and four more expected to be awarded within the coming year, according to Mr. Sinn Chanserey Vutha, the spokesman of the State Secretariat of Civil Aviation (SSCA).

A total of 7 airlines obtained the licensed for operations in Cambodia, with two of the new air operator’s certificates (AOC) issued recently to:

• JC International Airlines
• Lanmei Airlines 
• Small Planet Airlines (was awarded an AOC to commence service in no time.) 

Additional licences are in the pipeline for 

• KC International Airlines 
• Air Siem Reap 
• Prince International Airlines 
• Cambodia Airways

Earlier this month, the SSCA granted an AOC to Small Planet Airlines, the Lithuanian-based leisure airline, which operates charter flights between coastal resorts in the Mediterranean region from Lithuania, Poland and Germany. Erikas Zubrus, CEO of Small Planet Airlines Cambodia, said the airline plans to serve Hong Kong, China and South Korean markets in Cambodia while it has also applied for approvals to serve Thailand, Japan and islands in the Pacific region.

KC International Airlines is in the list to obtain AOC's approval. The airline startup, a $100 million Chinese-Cambodian joint venture with ties to the ruling party, expects to launch service early next year to tap into the lucrative Chinese travel market. Vong Kong Leng, the airline’s director of administration and human resources, said the new airline will leverage its Chinese director’s 15 years of experience in the aviation business to fill a niche in the local market.

Prince International Airlines (PIA) and its sister airline Cambodia Airways have also applied for AOCs and expect to commence commercial operations in early 2018. The two airlines, a project of the Chinese investors behind Prince Real Estate, are headed by a former executive of Cambodia Bayon Airlines and will look to convert their board’s connections with Chinese travel agencies into ticket sales.

According to the company, PIA aims to launch with three A320 aircraft to serve the tourism charter market and two Gulfstream jets for local business clients. Cambodia Airways has set plans to operate 10 Airbus 320s and two A330s within the next five years. The airline is expected to operate scheduled flights to Japan, South Korea and Asean countries, as well as international routes to Europe and Asia.

Air Siem Reap, a joint venture between Thai “boutique” carrier Bangkok Airways and Cambodian tycoon and ruling party Senator Ly Yong Phat, has applied to operate flights based in Siem Reap International Airport.

The new airlines will tighten competition in Cambodia’s increasingly crowded air space where over 40 commercial airlines operate scheduled flights. They could also put more pressure on locally registered carriers, particularly those that operate domestic services.

Cambodia has a reputation as one of the easiest markets for startup airlines to obtain an AOC, however the Kingdom has proven a challenging market, with a list of over 30 now-defunct airlines.

The most recent was Apsara International Air, which launched in October 2014 but within weeks had mothballed its sole Airbus 320 after incurring huge losses.

In a report issued earlier this year, Australia-based aviation research and consulting firm the Centre for Aviation (CAPA) warned that startup airlines could face severe headwinds in Cambodia’s already oversaturated aviation market.

Yet SSCA had no intention of capping the number of AOCs, though it could place restrictions on route permits.