Feb 25, 2014

Philippine Airlines To Launch A Cambodian Carrier

Philippine Airlines says it will still pursue plans to launch a Cambodian carrier with local partner, Royal Group, despite lengthy delays, fears of political unrest and aviation industry skepticism over the viability of another entrant into the small domestic market.

The Philippine news site ABS-CBN reported Philippine Airlines (PAL) denied, last week, that it was shelving a joint venture deal with Royal Group of Cambodia to form Cambodia Airlines.

“We wish to clarify that on-going preparations for the completion of the contemplated joint venture agreement between Philippine Airlines, Inc. and Inter Logistics (Cambodia) Co Ltd relating to Cambodia Airlines Co Ltd are currently being conducted,” PAL said in a disclosure to the stock exchange.

“As such, it is not true that the joint venture project has been ‘shelved’,” it added.
PAL issued the clarification after Business Mirror quoted the Center for Asia-Pacific Aviation (CAPA) as saying “PAL’s decision to shelve and question the viability of its Cambodian joint-venture project is the right move.”

“The group should focus on the Philippine market, where it has opportunities, but challenges including stiff competition from low-cost carriers. It should avoid the temptation of revisiting the Cambodian project or pursuing any other potential overseas joint venture,” the CAPA said.

The centre is a highly reliable and respected source of independent news and analysis on the region’s aviation.

Cambodia Airlines, which aims to become the country’s second full-service carrier after Cambodia Angkor Air, was initially supposed to launch services in mid-2013 with a US$1 million investment from PAL. But after missing closing dates in June and October, the venture has yet to be finalized.

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