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Cambodia Hopes New National Airline Will Boost Tourism

07/09/09September 7, 2009

The global financial crisis has slowed the progress of economic development in Cambodia considerably. One of the most seriously affected sectors is tourism. There is a decline in the number of tourists and, as a result, in the country's national income. The government has tried many measures to stabilize the situation. This includes launching a new national airline.

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The new airline flies daily to Siem Reap, the home of the ancient Angkor Wat temple
The new airline flies daily to Siem Reap, the home of the ancient Angkor Wat templeImage: picture-alliance / dpa

Cambodia Angkor Air started operating in late July. It is a joint venture between Cambodia and Vietnam Airlines, though Cambodia has a 51 percent stake. It is the first national airline in Cambodia since the Royal Air Cambodge went bankrupt in 2001 with estimated losses of 30 million US dollars.

Dinh Synhad Quang of Cambodia Angkor Air says he is optimistic about the new airline’s success. “We’re different, different in management technology, different in management skill, in human resource, in flight network, everything is different.”

Low cost travel

With $100 million investment, Cambodia Angkor Air operates daily flights between the capital Phnom Penh and Siem Reap which is a famous tourist destination as the home of the ancient Angkor Wat temple. It also flies to Vietnam’s Ho Chi Minh City.

The launch of the airline has been hailed by many as tourism contributes nearly 13 percent to the country’s gross domestic product. “It has brought down the airfare by about 50 percent,” says Chan Sophal, president of the Cambodian Economic Association. “It helps the economy by reducing the cost of travelling; it can attract more tourists to Cambodia.”

Vietnam’s investment

The joint venture is also an opportunity for Vietnam to boost its investment in Cambodia. The country has already invested millions of dollars in Cambodia's telecommunication, banking and agriculture sectors in recent years.

“Vietnam has received a lot of foreign direct investments,” says economist Sophal. “There seems to be surplus capital and now it appears to spill over to Cambodia. It’s a good time when the economic situation is quiet, so there’s a lot of space for people with cash to make investment projects happen.”

Sophal also believes the latest co-operation will help Cambodia improve its aviation sector:

“Vietnam Airline has been successful, they have been expanding worldwide and I think we can benefit from that. Cambodia is a small country compared to Vietnam and Thailand. We are probably not able to do airline business on our own so it’s not a bad idea to have a joint venture at the beginning. Hopefully we can learn by doing and operate the business independently at some point.”

Cambodia Angkor Air currently has three planes, including one airbus A321. It is expected to purchase more aircrafts next year. The airline also plans to expand its route to other countries in South East and East Asia.

Author: Sirivaddhana Yinn
Editor:Grahame Lucas