AirAsia Cambodia launches anticipates aviation sector growth

A new low-cost airline, AirAsia Cambodia, was launched yesterday marking a significant milestone in Southeast Asian aviation. The chief executive of Capital A, AirAsia’s parent company, Tony Fernandes, anticipates a promising outlook for aviation in the region, driven by an increased influx of Chinese tourists, particularly in Thailand, despite soaring fuel costs and a robust US dollar.

“Despite the economic downturn, the demand for air travel in Southeast Asia remains robust.”

He also noted a 25% rise in average airfares compared to pre-pandemic levels, attributing this to the lessons learned from the pandemic, thereby reducing the likelihood of an immediate price war among airlines.

Fernandes also envisaged a potential reduction in airfares if regional central banks reduced their interest rates, an event he predicted might occur in 2025. Concurrently, an agreement was signed between AirAsia Aviation Group, the aviation arm of Capital A, and Sivilai Asia, paving the way for the establishment of AirAsia Cambodia.

The Chief Executive of AirAsia Cambodia, Vissoth Nam, sees the launch as a new era for Cambodia’s tourism sector, which mentions that the AirAsia network will enhance economic activities through increased tourism and business opportunities. He also highlighted the alignment of the airline’s launch with Cambodia’s efforts to boost tourism in Siem Reap as part of the Visit Siem Reap 2024 campaign.

According to Cambodia’s Ministry of Tourism, the country witnessed a surge in international tourists, from 2.27 million in 2022 to 5.43 million, last year. AirAsia Cambodia currently operates two aircraft from its hub at Phnom Penh International Airport. It services domestic routes to Siem Reap and Sihanoukville and aims to expand its fleet to five aircraft by the end of the year.

The airline is expected to announce new international routes within the next quarter, potentially including direct flights to Kuala Lumpur, Bangkok, and various Chinese cities. However, Fernandes cautioned that the challenge now is the shortage of aircraft. We must negotiate with Airbus regarding deliveries.

AirAsia Cambodia has set a target of carrying 1.8 million passengers this year, with the majority being domestic travellers initially. The airline also plans to expand its fleet to 25 aircraft within five years, subject to the assessment of travel demand, reported Bangkok Post.