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Malaysia’s AirAsia looks to expand into the Kingdom

Jose Rodriguez T. Senase / Khmer Times Share:
An AirAsia aircraft on the tarmac at Phnom Penh International Airport. KT/Khem Sovannara

Acknowledging the potential that Cambodia holds in terms of air travel and tourism, budget airline AirAsia is eyeing to expand into Cambodia through partnership with a local player.

The Nikkei Asian Review reported this week that Cambodia is among three countries in Asia where AirAsia is looking at having a local affiliate. The report also mentions Myanmar and China as the other countries where the Malaysia-headquartered budget carrier wants to expand.

Tony Fernandes, AirAsia CEO and co-founder, said in the Nikkei Asian Review article that their repeated failure to establish a Vietnamese affiliate pushed them to look elsewhere in the region.

AirAsia has tried three times to engage with a Vietnamese partner, but for various reasons, negotiations broke down or partnerships fell through.

Among the major reasons Mr Fernandes cited for their failure to enter Vietnam is the failure to find the right partner and the presence of many airline companies.

The latest failure came in April of this year when Air Asia Limited, the airline’s wholly-owned subsidiary, amicably terminated its partnership with Gumin Company Limited and Hai Au Aviation Joint Stock Company.

“We cannot find the right partner and now I think there are too many airlines there,” he stressed. “I like Cambodia. We are now on the lookout for a Cambodian partner.”

AirAsia already flies to Cambodia, but unlike in Indonesia, Thailand and other countries in Southeast Asia, currently does not have a local affiliate here.

Cambodia’s growing reputation as a tourism destination has led to many foreign carriers to look at expanding into this Kingdom of 16 million people.

There are currently 49 airline companies that serve the Cambodian aviation market. While many of these are foreign carriers, there are also an increasing number of home-grown airlines, many of them set up with Chinese assistance, that have started operating out of Cambodian airports.

Cambodia is the third-fastest tourism destination in Southeast Asia after Vietnam and Indonesia.

In 2018, Cambodia received a total of 6.2 million visitors, with another 6.7 million expected by the end of this year.

Cambodia’s push to develop more ecotourism sites could lead to more foreign visitors coming to the Kingdom in the next few years. Cambodia is targeting 12 million foreign visitors by 2025.

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