Flights To Start In Six Months Due To Tourism Increase

The Cambodian government signed a joint venture agreement with two Indonesian companies Friday, to form a new national airline to exploit the country's growing tourism industry.

The new Cambodian airline, with no name at this time, is expected to begin flying in six months, according to The Associated Press. Cambodia's previous flag carrier, Royal Air Cambodia, went bankrupt five years ago.

The joint-venture agreement was signed between Cambodia with Rajawali Group and PT Ancora International. The Indonesian partners' businesses include cigarettes, cement, telecommunications, hotels, resorts, extractive minerals and airlines, according to officials with both companies.

"Our country is proud of creating this new airline," said Sok An, deputy prime minister and minister in charge of civil aviation for Cambodia.

Travel to and from Cambodia is currently dominated by foreign-owned airlines.

The Cambodian government will hold a 51 percent share in the new venture and its partners 49 percent, it said. The joint arrangement allows the foreign firms providing the capital for the airline to receive a total of 70 percent of potential profits, while the remaining 30 percent will go to the government.

Peter Sondakh, chairman and CEO of Rajawali Group, would not discuss other details with reporters, apart from saying it will operate with "better aircraft and better service" to compete with foreign airlines.

"We envisage more and more travelers coming to Cambodia, and the new national carrier will become indispensable for the tourism market," said Vichit Ith, managing director of PT Ancora International.

Cambodia has received more than 19 percent more visitors between January and September this year or 1.4 million tourists, over the same time in 2006, according to the Tourism Ministry. Forecasts by the ministry expect arrivals to exceed last year’s 1.7 million tourists.

Sok An also implied the partners have planned ahead if things go south. "Any bankruptcy or insolvency will be borne by all parties," he said.

FMI: www.car.gov.kh/rgc/rgc_en.asp