AirAsia Aviation Group Limited (AAAGL), the aviation arm of Capital A Berhad, signed a Joint Venture (JV) agreement with Sivilai Asia to establish AirAsia Cambodia, a new low-cost airline in the Kingdom of Wonder.

The new airline will further cement AirAsia’s brand in Cambodia and Indochina, providing AirAsia with greater access to its domestic market and most importantly connecting it to the international markets across Asean, North Asia and beyond. This new airline will allow AAAGL to operate to the various existing markets where it already has presence and operations to build scale, network connectivity and further reduce the cost of operations. AirAsia Cambodia aims to further stimulate the Cambodian aviation and tourism industries, launch exciting new destinations, create jobs and bring a true low cost operation to the country.

The JV was signed by Tony Fernandes, CEO of Capital A and Vissoth Nam, Director of Sivilai Asia at Rosewood Phnom Penh today. The signing was witnessed and presided over by His Excellency Dr. Mao Havannal, Minister in Charge of State Secretariat of Civil Aviation, Bo Lingam, Group CEO of AAAGL; Subashini Silvadas, CEO of AirAsia Consulting; as well as several key government and industry partners. Subject to obtaining the relevant regulatory approvals, the JV is expected to commence operations in late 2023.

Tony Fernandes, CEO of Capital A said: “Capital A continues to focus on Asean where we know best and our brand is the strongest. Cambodia is the fifth Asean country where we are continuing our march of being the region’s number one mover of people and cargo, and providing a linchpin of economic growth for Asean countries. The value of AirAsia’s network is an insurmountable asset; it will be another flag of extensive connectivity in Cambodia and into the region, namely China, India and North Asia.

“2022 was about restarting our airline to pre-Covid levels. That machine is in place and will be completed by the second quarter of 2023. The second half of 2023 will be when we focus on our continued efforts in growth. We are confident of profitability in the first year. As Cambodia is a market that is familiar to us and where we have deep infrastructure in place. That’s why all our future airlines will be based in Asean. As this is an area we know well and can derive quick profitability and connect our very large network to the main points of Cambodia, namely Phnom Penh, Siem Reap and Sihanoukville.

“As we celebrate our 21st birthday on 8 December 2001, when we dreamt of bringing Asean closer, our mission remains the same – to democratise air travel and connect people and places, providing the best values, driving tourism and boosting economic growth in Asean. Capital A will continue to build on this growth and I am confident about the opportunities serving one of the most dynamic, fastest-growing economies in Asean both in the digital and aviation sectors.”

Vissoth Nam, director of Sivilai Asia said: “As one of the first countries to open up international travel with no quarantine in November 2021, Cambodia has led the way in Asean’s air travel recovery journey post-COVID, with the rest of countries in the region following suit. Today, we are proud to be the catalyst for a new low cost airline operating from Cambodia.

“An increase in connectivity alongside best value fares, will certainly stimulate demand for air travel amongst the population due to increased airline and destination choices. This will open the doors for students travelling abroad, supporting work-related travel, boosting trade ties, and providing a welcome boost for the growth of new small and medium enterprises.

“This could not have been achieved without the support from our local government and tourism partners in Cambodia, numerous other relevant authorities and AAAGL. We would like to extend our heartfelt gratitude for their continued support in making AirAsia Cambodia a reality and for giving us the chance to contribute to Cambodia’s government strategy in further expanding its connectivity and promoting tourism in the region. We cannot wait to connect the people of Cambodia to the rest of Asean and beyond soon.”

Bo Lingam, Group CEO of AAAGL said setting up a majority controlled JV in Cambodia is a natural step for the Group as AAAGL is the largest foreign airline and the second largest airline group overall operating into Cambodia in terms of capacity. Pre-pandemic, AirAsia operated 90 weekly flights from Malaysia and Thailand and is currently flying about 49 weekly flights to Cambodia.

“Setting up a JV in Cambodia is in line with our Asean expansion strategy. We plan to operate mostly to our existing stations within the four hour radius from the Kingdom. AirAsia Cambodia will increase Cambodia’s network offerings by launching new services to Asean, North Asia and beyond in the future.

“This is a true testament to a successful partnership between AAAGL and Sivilai Asia. We are excited about the prospect of delivering the best value low-cost air travel connectivity, experience and convenience to the seventh largest country in Asean.”

AAAGL operates five routes to Cambodia from Kuala Lumpur to Siem Reap and Phnom Penh, from Penang to Phnom Penh (starting 23 January 2023) as well as from Bangkok (Don Mueang) to Siem Reap and Phnom Penh. Since entering the Cambodian market in 2005, AirAsia has carried over 10 million guests to and from Cambodia.