CAA ups ante domestically

In a likely bid to tighten its monopoly on domestic air services, Cambodia Angkor Air (CAA) has scheduled to increase its number of flights from July, when a new airline, Cambodia Airlines, is expected to break into its home ground.

According to CAA’s website, direct flights will take off between Phnom Penh and Siem Reap five times a day, up from three to four times currently. Also, flights from Sihanoukville to Siem Reap and to Phnom Penh will launch daily, up from three times a week, although certain legs still involve a stopover at another airport.

The increased frequencies have been scheduled to commence on July 1, although this is not CAA’s peak business period.

The  airline, currently Cambodia’s sole operator for scheduled domestic flights, is likely reacting to “the prospect of new competition in the domestic market,” according to a report released yesterday by the industry think-tank Centre for Aviation.

Demand has been high for flights serving Sihanoukville, “but the carrier delayed several times implementing plans to make the service daily”, the report said.

“There was previously little incentive for Cambodia Angkor Air to add capacity or launch new routes at Sihanoukville. The planned launch of Cambodia Airlines has changed the situation significantly,” the report added.

Earlier in April, the Post reported that Cambodia Airlines would likely launch flights linking Sihanoukville, Siem Reap, and Phnom Penh by July.

The new player would be 51 per cent owned by local conglomerate Royal Group, with Philippine Airlines owning the rest.

But it remains to be seen if the market can support a significantly busier domestic schedule from both airlines, said Center for Aviation’s chief analyst, Brendan Sobie.

While more competition means lower fares, “will it stimulate enough demand to fill up all the seats? If there are more seats than demand, the airline [CAA] might reduce its capacity.”

“But it is too early to tell as we do not know Cambodia Airlines’ network or strategy yet,” he added. Both airlines could not be reached for comment as of yesterday.

Cambodia Association of Travel Agents’ vice-president, Chhay Sivlin, said that even with CAA’s latest move, there is still space in the domestic market for Cambodia Airlines. It can provide better services or fly to new places like Ratanakkiri before CAA does, she said.

Cambodia Airlines can also compete through cheaper fares, she said. A two-way flight from Phnom Penh to Siem Reap costs at least $160 now – even pricier than from Phnom Penh to Bangkok, though the latter journey is longer, she added.

Sourced: The Phnom Penh Post