Budget airlines AirAsia’s parent Capital A and its Cambodian partner Sivilai Asia are establishing a maintenance, repair and operations (MRO) business in Cambodia via their wholly-owned subsidiary Asia Digital Engineering (ADE), a project which is “increasingly important to Capital A’s commercial aviation strategy in the coming years”.
According to US-based Aviation Week Network publication, which quoted Capital A’s filing with Malaysia’s stock exchange on September 20, ADE would hold a 60 per cent stake in the joint MRO business with the remaining 40 per cent held by Sivilai Asia. It wrote that ADE would inject $1.2 million into the joint venture in two tranches, the first during pre-incorporation and the second after incorporation.
Aviation Week Network stated that the establishment of the joint Capital A-Sivilai MRO unit follows an agreement reached between the two companies in December 2022 to launch AirAsia Cambodia.
“Capital A holds a majority 51 percent stake in that business [AirAsia Cambodia], while Sivilai has a 49 percent share. AirAsia Cambodia plans to fly routes within a four-hour radius of the country and will focus on flying to existing AirAsia hubs from Siem Reap, Sihanoukville, and Phnom Penh.
“This would create an opportunity for ADE to establish its operation in Cambodia by providing service to AirAsia Cambodia and other third-party airlines operating into Cambodia major airports. The joint venture would enable Capital A to capitalise on cost-saving opportunities and potentially capture surpluses from new revenue streams generated,” said Capital A in the filing, as quoted by the publication.
Aviation Week also mentioned that during Capital A’s annual general meeting on June 15, CEO Tony Fernades reiterated that the company is “expanding throughout Southeast Asia and that AirAsia Cambodia is expected to begin operations in the fourth quarter of 2023”.
The online portal quoted Fernandes as saying that the MRO is a “very profitable business” and that “within four to five years, if the group stays as it is, ADE would contribute 30 per cent to 40 per cent of Capital A’s profits”.
Meanwhile, Sinn Chansereyvutha, spokesman for the State Secretariat for Civil Aviation (SSCA) told The Post on September 25 that currently, AirAsia operates three flights daily to Malaysia, two flights daily to Thailand and one flight daily to Indonesia.
“The airline has not increased any flights yet. We welcome their new business as it can contribute to the development of the aviation sector in the country,” he said.
On September 15, 2023, AirAsia announced that it would relocate its operations to the new Siem Reap-Angkor International Airport (SAI) effective October 16. Once operational, AirAsia would occupy 16 check-in counters - Row C01-C16 - at the new terminal, enabling faster and smoother flight check-ins.
Previously, Chansereyvutha shared that a total of 26 international airlines were operating 844 flights to or from Cambodia each week as of end-May. Counting those inbound and outbound separately, most of the flights operate within ASEAN.
Phnom Penh accounted for the majority of the flights at 634 or 75.1 per cent, followed by Siem Reap (196; 23.2%) and Sihanoukville (22; 2.6%). Forty three airlines were operating in Cambodia in 2019 prior to the pandemic, excluding those solely running charter services.
Data from the Ministry of Tourism showed that from January to July 2023, Cambodia received over three million foreign visitors, which is an increase of 308.5 percent from 743,459 in the same period in 2022.
In 2022, Cambodia welcomed nearly 2.3 million international visitors, up 1,059 per cent compared to 2021, of which 463,995 arrived from Vietnam, which represented an increase of 1,997.6 per cent compared to 22,120 in 2021.