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AirAsia expands its horizons with the inauguration of a Cambodian airline

AirAsia expands its horizons with the inauguration of a Cambodian airline

Southeast Asia’s aviation industry is viewing a promising outlook in the latter half of this year, particularly with the growing influx of Chinese tourists across the region, especially in Thailand. Tony Fernandes, the CEO of Capital A, the parent company of AirAsia, the region’s largest low-cost carrier by fleet, highlighted the positive stance on the industry.

Despite challenges like escalating fuel prices due to geopolitical tensions and the robust US dollar against local currencies, causing financial strains due to expenses being in US dollars, Fernandes remains optimistic due to strong demand for air travel in Southeast Asia.

Airfares have experienced a 25% increase compared to pre-pandemic levels, yet Fernandes predicts that airlines will not engage in price wars in the near future, having learned from past experiences during the pandemic. He also mentioned the potential for airfares to decrease if central banks in the region opt to lower interest rates, a scenario projected for 2025.

In a significant move, AirAsia Aviation Group, under Capital A, inked a joint venture pact with Sivilai Asia to introduce AirAsia Cambodia, a new low-cost airline in the country. The CEO of AirAsia Cambodia, Vissoth Nam, shared during the launch of the inaugural domestic flights that this milestone signifies a new era for Cambodia’s tourism sector.

By leveraging the AirAsia network, the airline aims to stimulate economic growth through enhanced tourism and business opportunities. AirAsia Cambodia currently operates two aircraft from Phnom Penh International Airport, covering domestic routes to Siem Reap and Sihanoukville, with plans to scale up the fleet to five by year-end.

Future plans involve introducing new international routes in the upcoming quarter, potentially linking destinations like Kuala Lumpur, Bangkok, and various cities in China. Over the next five years, the carrier targets a fleet of 25 aircraft, aligning expansion with evolving travel demand.

While the immediate focus is on domestic travel, AirAsia Cambodia seeks to accommodate 1.8 million passengers this year, with projections leaning towards greater international connectivity as operations expand. Aircraft procurement remains a key consideration, with negotiations ongoing with Airbus concerning deliveries.

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