AirAsia Aviation Group Limited (AAAGL), the aviation arm of Capital A Berhad, has on Friday signed a joint venture (JV) agreement with Sivilai Asia to establish AirAsia Cambodia, a new low cost airline in the Kingdom of Wonder.

AirAsia said in a statement that the new airline will further cement AirAsia’s brand in Cambodia and Indochina, providing AirAsia with greater access to its domestic market and most importantly connecting it to the international markets across Asean, North Asia and beyond.

According to the statement, this new airline will allow AAAGL to operate to the various existing markets where it already has presence and operations to build scale, network connectivity and further reduce the cost of operations.

It said AirAsia Cambodia aims to further stimulate the Cambodian aviation and tourism industries, launch exciting new destinations, create jobs and bring a true low cost operation to the country.

Subject to obtaining the relevant regulatory approvals, the JV is expected to commence operations in late 2023.

“Capital A continues to focus on Asean where we know best and our brand is the strongest. Cambodia is the fifth Asean country where we are continuing our march of being the region’s number one mover of people and cargo, and providing a linchpin of economic growth for Asean countries,” said Tony Fernandes, Chief Executive Officer of Capital A.

According to him, the value of AirAsia’s network is an insurmountable asset, and it will be another flag of extensive connectivity in Cambodia and into the region, namely China, India and North Asia.

“2022 was about restarting our airline to pre-Covid levels. That machine is in place and will be completed by the second quarter of 2023. The second half of 2023 will be when we focus on our continued efforts in growth,

“We are confident of profitability in the first year. As Cambodia is a market that is familiar to us and where we have deep infrastructure in place. That’s why all our future airlines will be based in Asean. As this is an area we know well and can derive quick profitability and connect our very large network to the main points of Cambodia, namely Phnom Penh, Siem Reap and Sihanoukville,” he said.

He also said the company’s mission remains the same – to democratise air travel and connect people and places, providing the best values, driving tourism and boosting economic growth in Asean.

“Capital A will continue to build on this growth and I am confident about the opportunities serving one of the most dynamic, fastest-growing economies in Asean both in the digital and aviation sectors,” he added.

Sivilai Asia Director Vissoth Nam said as one of the first countries to open up international travel with no quarantine in November 2021, Cambodia has led the way in Asean’s air travel recovery journey post-COVID, with the rest of countries in the region following suit.

“An increase in connectivity alongside best value fares, will certainly stimulate demand for air travel amongst the population due to increased airline and destination choices,

“This will open the doors for students travelling abroad, supporting work-related travel, boosting trade ties, and providing a welcome boost for the growth of new small and medium enterprises,” he said.

AAAGL Group Chief Executive Officer Bo Lingam said setting up a majority controlled JV in Cambodia is a natural step for the group as AAAGL is the largest foreign airline and the second largest airline group overall operating into Cambodia in terms of capacity.

According to him, pre-pandemic, AirAsia operated 90 weekly flights from Malaysia and Thailand and is currently flying about 49 weekly flights to Cambodia.

“Setting up a JV in Cambodia is in line with our Asean expansion strategy. We plan to operate mostly to our existing stations within the four hour radius from the Kingdom. AirAsia Cambodia will increase Cambodia’s network offerings by launching new services to Asean, North Asia and beyond in the future,” he said.

“This is a true testament to a successful partnership between AAAGL and Sivilai Asia. We are excited about the prospect of delivering the best value low-cost air travel connectivity, experience and convenience to the seventh largest country in Asean,” he added.

AAAGL operates five routes to Cambodia from Kuala Lumpur to Siem Reap and Phnom Penh, from Penang to Phnom Penh (starting January 3, 2023) as well as from Bangkok (Don Mueang) to Siem Reap and Phnom Penh.

Since entering the Cambodian market in 2005, AirAsia has carried over 10 million guests to and from Cambodia.

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