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Blacklist fears for aviation authority

Cambodia's aviation industry regulator, which approved three airlines for operations in the past six months and says more are on the way, is at risk of being “blacklisted” by the international safety authority.

The Australian-based Centre for Aviation (CAPA) on Friday published the second part of a Cambodian aviation sector analysis. CAPA’s chief analyst and author of the report, Brendan Sobie, said Cambodia’s State Secretariat of Civil Aviation (SSCA) is currently being audited by the International Civil Aviation Organization (ICAO).

“An outcome from the audit is expected in two months. The existing and potential future airlines are worried the audit could result in Cambodia being placed on ICAO’s blacklist,” Sobie’s analysis reads.

The reasons for the concern, Sobie says, are Cambodia’s lax regulations on foreign airline ownership, which provide an easy alternative for start-up airlines targeting the high-growth Chinese market to attain Airline Operations Certificates (AOC).

“Cambodia for some time has been viewed as a backdoor option for getting an AOC,” Sobie’s analysis says.

“As it is much more difficult to start an airline in China, establishing a Cambodian airline to pursue the China-Cambodia market represents a far more attractive solution.”

According to the Singapore-based aviation analyst, Chinese authorities have begun to monitor Cambodia’s growing airline sector, while the SSCA is also looking to tighten its AOC approval regulations.

ICAO’s Universal Safety Oversight Audit Programme (USOAP) assesses each country’s aviation legislation and regulation, personnel licensing activities, aircraft operations and airworthiness, air navigation services, accident and serious incident investigations.

Cambodia's latest audit results, taken in 2007 and updated in May 2014 by an ICAO representative, show all criteria to be well below the international standard with both air navigation services and accident
investigations almost 40 per cent below the international safety standard.

ICAO’s “blacklist” refers to the nations that record the worst in USOAP safety oversight scores.

Moeung Sathya, director and projects coordinator at the SSCA’s Department of Planning, Strategy and Policy denied that a new audit was under way or that the national regulator was at risk of being labelled “blacklisted”.

“There was the audit last year, and we do not expect another until later this year,” Sathya said, declining to provide details of the past audit results.

“No, it is not true, because the SSCA has issued the AOC according to its own standards and those are according to international regulations. So it is simply not true that there is a risk of being blacklisted.”

Cambodia’s local aviation sector is quickly becoming crowded after the SSCA in 2014 approved Bassaka Air, Bayon Air and Apsara Air for AOC licences during the final quarter of last year.

All three airlines had intentions of expanding routes to the booming China-Cambodia tourism market, which has grown five-fold since 2009 from 10,000 Chinese visitors to the Kingdom, to more than 52,000 last year.

However, China’s tight foreign airline service regulations and even tighter competition with existing airlines have so far kept Bassaka and Bayon from establishing international flights. Apsara last month ceased all operations and has yet to relaunch.

Cambodia’s questionable regulatory environment combined with the now-crowded local market prompted a caution from CAPA’s Brendan Sobie to would-be airline start-ups to reconsider their plans.

“Cambodian authorities have said there are another three start-ups seeking to launch services,” the report said.

“All three seem to be reassessing the market, a sensible move as the Cambodian airline sector is now relatively crowded . . . there will also almost certainly be some adjustments to Cambodia’s dynamic airline sector. Among these will be the nature of national regulatory activity.”

Bayon, Bassaka and Apsara did not return requests for comment.

An earlier version of this article stated that the SSCA had been audited by ICAO in May 2014. In fact, SSCA's ICAO representative in May last year provided a progress update on the implementation of findings from a 2007 ICAO audit. ICAO's safety oversight audit results for Cambodia's aviation authority remain the same. Another full ICAO audit has been delayed and is expected this year.
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