3-5-2024 (PHNOM PENH) AirAsia, the largest low-cost carrier in Southeast Asia, has launched its latest airline, AirAsia Cambodia, with inaugural flights commencing on Thursday. The move comes as the aviation industry in Southeast Asia remains optimistic about the second half of this year, fueled by an increase in inbound Chinese tourists across the region, particularly in Thailand. Tony Fernandes, the CEO of Capital A, AirAsia’s parent company, expressed confidence in the demand for air travel in Southeast Asia, despite challenges such as rising fuel prices and the strong US dollar.
Fernandes acknowledged the impact of geopolitical conflicts and currency fluctuations on airlines, as expenses are predominantly paid in US dollars. However, he emphasized that the sluggish economy does not deter the strong demand for air travel in the region. Compared to pre-pandemic levels, average airfares have risen by 25%. Fernandes believes that airlines have learned from the pandemic and are unlikely to engage in a price war in the short term. He suggested that airfares may decrease if central banks in the region lower interest rates, a possibility he foresees in 2025.
#AirAsia‘s 7th airline is here! ✈️
Welcome to the family, AirAsia Cambodia! ????????
The World’s Best is now painting the Cambodian skies red, cementing the airline’s footprint in Asean and beyond. ✨️ pic.twitter.com/3yR0Hs1Q8a
— AirAsia (@airasia) May 1, 2024
As part of its expansion plans, AirAsia Aviation Group, the aviation arm of Capital A, has signed a joint venture agreement with Sivilai Asia to establish AirAsia Cambodia as a new low-cost airline in Cambodia. Vissoth Nam, the CEO of AirAsia Cambodia, highlighted the significance of this development for Cambodia’s tourism industry. He emphasized that the AirAsia network would stimulate economic activities by creating more robust tourism and business opportunities. Nam also mentioned the Cambodian government’s efforts to attract more tourists to Siem Reap through the Visit Siem Reap 2024 campaign.
In 2023, Cambodia welcomed 5.43 million international tourists, a substantial increase from the 2.27 million visitors in 2022, according to the Ministry of Tourism. AirAsia Cambodia currently operates with two aircraft from Phnom Penh International Airport, serving domestic routes to Siem Reap and Sihanoukville. The airline plans to expand its fleet to five aircraft by the end of this year. In the next quarter, AirAsia Cambodia will announce new international routes, potentially including direct flights to Kuala Lumpur, Bangkok, and various Chinese cities.
Looking ahead, AirAsia Cambodia aims to have a fleet of 25 aircraft within the next five years. However, the carrier intends to carefully assess travel demand before expanding further. Fernandes acknowledged the current shortage of aircraft and the need to negotiate with Airbus regarding deliveries. AirAsia Cambodia targets a passenger volume of 1.8 million this year, predominantly consisting of domestic travelers initially.
