New CAA fleet to take flight

Cambodia Angkor Air (CAA) intends to acquire seven more planes by 2015, more than doubling its existing fleet of five, as the airline plans new routes in the next few years to China, South Korea, Hong Kong and India.

The plan was unveiled at an industry workshop in Phnom Penh two days ago. By 2015, the airline – which currently has three Airbus A321 for international flights and two ATR-72 turboprop planes serving mostly domestic destinations – will have six of each aircraft model, a company representative said at the workshop.

Also in the works are new routes to Shanghai, Guangzhou, Seoul and Pusan, South Korea, this year. The airline also plans to fly to Hong Kong in 2014, and India by 2015.

CAA’s vice chief executive, Lim Kao, said the new acquisitions will begin with an ATR-72, likely to be brought in around July or August this year. “This is to prepare for the high season for tourism [from November],” he said.

The new addition will allow for daily flights between Siem Reap and Sihanoukville, up from three times a week, Lim added.

Of the seven planes to be brought in, “some will be leased, and some will be purchased,” depending on the board members’ eventual decisions, Lim said, declining to elaborate.

A new Airbus A321 costs about $110 million, while the leasing fee is $300,000 per month.

According to a source close to CAA, part of the payment for the planes may come from the $100 million capitalisation that CAA received when it was founded in 2009. The source declined to be named, as negotiations have not been finalised.

Last month, the Post reported that CAA is forecasting a loss for this year and the next as it adds new international routes, which will initially see lower demand.

But Lim says losses will not derail the airline’s fleet expansion plans. “Our losses will not be big, because we are a small country and have small operations. We still will have funds.”

The Centre of Aviation’s chief analyst, Brendan Sobie, believes that CAA will lease most, if not all, its planes, as buying a new aircraft costs “a lot more money,” he said.

Additionally, ordering a new Airbus would make it “difficult to get it in time for its new routes” because of the long delivery queue, he added, unless the airline purchases it second-hand or accesses it through the outstanding orders of Vietnam Airlines, which holds a stake in CAA.

CAA’s plan to more than double its fleet size is a “very fast [development]”. But by international standards, CAA would still be “a very small airline”, Sobie said.

Having more planes will, however, “give them the economies of scale that they do not have now.”

Sourced: The Phnom Penh Post