Will Vietnam Airlines Get Out of its Joint Venture in Cambodia National Carrier?

Cambodia, Vietnam, air transport, Vietnam Airlines. Cambodia Angkor Air

According to the Khmer Times, Vietnam Airlines is ready to leave the joint venture created with the Cambodian government for the running of Cambodia’s national carrier Cambodia Angkor Air (CAA).

Ten years in existence and still struggling to be profitable. When the Cambodian government inked in 2009 a joint venture to create a new national carrier with Vietnam Airlines, the Vietnamese State carrier did not probably think that it would an impossible task. In fact, CAA since its inception, has been living with harsh competition -not only from foreign carriers flying into the Kingdom but also from other airlines established in the Kingdom.

Cambodia is having one of the most liberal open skies in Asia and in the world. Who ever has a bit of money to invest in air transport, can purchase aircraft and ask for an OAC (Operational Air Certificate) from Cambodian authorities to establish a carrier in the country. They will generally get it. Cambodia has these days still 10 air carriers based in the country. An enormous number as total passengers in the Kingdom  represents 10 million per year. Most of the new air carrier entrants are Chinese-backed investments…

Vietnam Airlines is certainly looking to exit a JV which did not produce any substantial benefits for the carrier. Talking to the Khmer Post, an aviation expert consultant, Frederic Chan, corporate investment and development officer at WS Asia Pacific Co Ltd, indicated to the newspaper that  “Vietnam Airlines partnered with the Cambodia government to set up Cambodia Angkor Air ten years ago in a way to help the Kingdom’s civil aviation industry.”

“Through the years Vietnam contributed a lot to the development of the civil aviation industry here, including in opening three routes between the two countries and the opening of a fourth one between Danang and Phnom Penh by the end of October. If this report is true, it just means that Cambodia Angkor Air, as a national carrier, will operate fully independent,” he added.

Cambodia Angkor Air has a fleet of six aircraft and serves 14 destinations out of Phnom Penh, including holiday flights to China as well as Siem Reap and Sihanoukville on domestic routes.