With millions of people wanting to travel again and airfares skyrocketing to all-time highs, it seems like the perfect moment to launch a new low-cost carrier. If you agree, you are in outstanding company, as Tony Fernandes, of AirAsia fame, has announced the birth of AirAsia Cambodia.

AirAsia picks Phnom Penh

According to Phnom Penh's Khmer Times, yesterday Fernandes told Cambodia's Secretary of State of the Ministry of Tourism, Chea Bora, that his company was establishing a branch in Cambodia under the name AirAsia Cambodia.

The new airline will be the fifth AirAsia offshoot in the region and aims to bring three to four million tourists annually to Cambodia. The report says that Fernandes will sign a Memorandum of Understanding with local companies in Phnom Penh today.

The Cambodian arm joins its siblings in Malaysia, Indonesia, the Philippines and Thailand. Capital A, the parent of AirAsia, is entering a joint venture with local partner Sivilai Asia and the airline is set to commence operations in the second half of 2023. Cambodian national Nam Vissoth will manage AirAsia Cambodia, and according to Reuters, the fully paid-up capital will be $25 million, with AirAsia's [undisclosed] share coming from internal funds.

Never short of surprises, Fernandes has sprung another one by announcing the new airline just weeks after selling his minority holding in AirAsia India. The stake was sold to the majority partner, Tata Group, owners of Air India, Air India Express and Vistara.

AirAsia Cambodia will start with A321s

In the meeting with the tourism ministry, AirAsia confirmed it would start the airline with four Airbus A321 aircraft. However, in a subsequent interview with Bloomberg TV, he said it would start with two and eventually expand to 15. The A321s are ideal for the market AirAsia has picked out, which is routes within a four-hour radius of Cambodia.

He also told Bloomberg that the airline would be "profitable from the get-go," adding:

"It's time for expansion and time for growth. Cambodia is a very attractive market, population is up to 13 million, huge tourism potential, not a lot of airline capacity here, the largest airline only has four planes."

China and India are on the radar

The target markets will start with ASEAN (Association of Southeast Asian Nations) routes, such as AirAsia strongholds in Malaysia, Singapore, Indonesia, Thailand and the Philippines. Capital A is also looking for AirAsia Cambodia to expand to Japan, China and India, filling the gap to India, which it says has no direct flights from Cambodia.

The AirAsia group currently operates around 50 weekly flights to Cambodia from Malaysia and Thailand, well down on the 90 it served before COVID-19. The new airline will look to add more travelers in and out of Cambodia as it gathers steam.

Reuters says Capital A also plans to start a new airline in Vietnam and combine its AirAsia aviation business with long-haul airline AirAsia X. It wants to use the restructuring to get rid of its 'financially-distressed firm' status but will still leave the airline brands operating separately.

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Does he look happy?

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Source: Khmer Times, Reuters, Bloomberg

• 

  AirAsia

  IATA/ICAO Code:

  AK/AXM

  Airline Type:

  Low-Cost Carrier

  Year Founded:

  1993

  CEO:

  Tony Fernandes

  Country:

  Malaysia

  Hub(s):

  Kuala Lumpur International Airport

  Region:

  Asia