Cambodia's airports too pricey for AirAsia

While AirAsia, one of the world’s largest low-cost airline, is gearing toward an expansion in the region, the company’s chief executive said that serving Cambodia was expensive due to high airport fees.

Airport charges are high and restrictive, as are over-flight fees, compared to other countries in the region – a factor that will influence the company’s decision whether to increase flights and destinations in the Kingdom.

“I’ve always had a bit of a problem with airports in Cambodia,” Tony Fernandes, AirAsia’s group CEO, said Tuesday at the launch of its ASEAN headquarters in Jakarta.

“But I know the Cambodian government is looking at it right now, because when they did those airports, there were no low-cost carriers.”

Aviation authorities in Cambodia could not be reached yesterday.

After 10 years of focusing on the Malaysian hub in which it started, the company will turn expansion efforts toward reaching a wider set of ASEAN destinations, specifically those in the region’s largest market, Indonesia.

The new HQ launch came on the eve of so-called “ASEAN Day”, marking the 45th anniversary of the economic bloc’s establishment.

Fernandes called Indonesia the “heart of ASEAN” and said attempts to grow further beyond the borders of its 10 member states, home to 690 million people, would come only after continued development within.

“When I started, everyone was talking about India and China. But we were looking at ASEAN,” he said, framing the carrier as an “ASEAN company”.

There is still room for growth in Cambodia, Fernandes noted. AirAsia will meet with Cambodian government officials at the end of August or the beginning of September to further address problems that might stymie growth in air travel.

He also expressed interest in Cambodia’s Sihanoukville airport, which sees little activity outside of charter flights.

“You have a fantastic airport in Sihanoukville where very few airlines are flying to right now. That would be an airport we’re interested in developing,” Fernandes said.

AirAsia is in talks with Indonesian carrier Batavia, but the government may review the proposed acquisition. The airline encountered regulatory problems in Vietnam last year during an attempted joint venture with VietJet. The deal was subsequently called off.

The Bursa, Malaysia-listed company has joint ventures in Japan, the Philippines, Indonesia and Thailand.

AirAsia Bhd closed up about 0.3 per cent yesterday at 3.7 ringgit (US$1.2).

While AirAsia flights from Cambodia are limited to Bangkok and Kuala Lumpur, efforts to enhance regional tourism have benefited the Kingdom indirectly, said Meng Hient, a Cambodian Association of Travel Agents member and owner of Exotissimo Travel Group.

“They don’t seem to be very active in Cambodia, but on the outside they are doing a lot to promote their destinations in the region,” he said. This is bringing tourists to ASEAN, many of whom will pass through Cambodia at some point during their journey.

The lower ticketing prices have indeed allowed for lower-income groups to travel between ASEAN states, Meng Hient said. The point was emphasised by Fernandes on Tuesday.

At a time when Asia’s economic spotlight seems fixed on China, AirAsia’s ASEAN business has brought increased connectivity to the region, Mohan Gunti, a member of Cambodia’s Tourism Working Group, said recently.

Sourced: Phnom Penh Post