Despite the rising number of passenger arrivals in two of Cambodia’s international airports, along with increasing routes and new destinations, the airline sector in Cambodia is said to be going through turbulent times.
Industry sources told Khmer Times that the unreliability of flights mounted by the numerous Cambodian-registered airlines couples with frequent cancelled or delayed flights, up to seven hours or more, has put a dampener on the initial enthusiasm which many Chinese investors had when applying for airline licences in Cambodia.
Even regularly scheduled mainstream airlines are said to be abruptly delaying, rescheduling or even cancelling flights altogether with no clear explanations given, and inconveniencing passengers.
According to the Cambodia airports website, almost 43 airlines are scheduled to operate flights to Cambodia during the winter season between Oct 27, 2019 and March 20, 2020. A bulk of these airlines are regular carriers from China and other national carriers or registered budget carriers.
The industry source said current airlines which are not state-owned and which are not large privately owned airlines are also suffering from poor passenger loads, partly brought by the exodus of Chinese nationals from Cambodia since the ban on online gambling was introduced.
“Another reason is the aggressive and at times blind expansion into areas where passenger yields were not thoroughly studied and also because of ‘ego’ expansion of routes to compete against each other.”
“It is not uncommon to check into a flight on any one of the Cambodian registered airlines and after waiting for hours and get informed that the flight has been cancelled for various reasons. Another reason is the waning drop in passenger load as a result of safety fears of some of the aircraft.”
External causes such as congested air traffic and big airport hubs in the South-East and North Asian countries explain some of those delays and cancelled flights, said Norinda Khek, communication and public relations director of Cambodia Airports. “Cooperation between aviation regulators and all other stakeholders [airlines, airports, air traffic controls] is instrumental to cope with the issue,” Khek added.
State Secretariat of Civil Aviation (SSCA) spokesman, Sin Chan Sereyvutha, said airlines have to set a new strategy and or switch to survival mode. He said that the delay of the planes happens for every country. He added that there are some measurements since the SSCA have called on airline companies to provide the reason and we advise them. He said some airlines have their own reason.
A rationalisation has been expected for some time and several of the locally registered airlines are looking for new investors with deep pockets to bail them out or even sell outright while at least one with reportedly deep pockets is looking at buying up its competitors one by one to remain as the sole carrier, possibly even as the national carrier.
This remains to be seen as airlines now brace themselves for the effects of the coronavirus now affecting China, causing passengers to cancel flights to China or delay their trips, further hurting cash flow and the bottom line with some struggling to even meet payroll commitments.
Phnom Penh is connected with 23 cities in China by air, while Siem Reap and Sihanoukville are linked to 23 and 15 destinations in that country, respectively.
Nineteen airlines operate routes between the countries; 14 of these airlines are Chinese and the rest are local, according to Cambodia’s State Secretariat of Civil Aviation.