WHEN the air over Cambodia was still relatively empty after the fighting in Phnom

Penh, Hun Sen called for a return to the "Open Sky" policy of the State

of Cambodia regime. "It is a return to the Hun Sen Policy," he announced

to a group of investors on July 22 at the Council of Ministers.

The statement put in motion an end to Royal Air Cambodge's monopoly on domestic air

transportation and gave the green light to a squadron of competitors. Whether the

frequency of flights will increase and fares will come down is not yet clear, but

a number of companies are eyeing the newly deregulated environment.

There are two new carriers in addition to Royal Air Cambodge plying international

routes out of Phnom Penh and two more have applied for licenses to join them. An

additional five companies have expressed interest in entering the market.

A noteworthy addition is Apsara First Cambodia Air Ltd, directed by tycoon Teng Boonma,

with his Taiwanese cousin KG Wong and Chi-Rui Chao as major shareholders. The airline

is slated to be a joint venture between Boonma and the upstart Taiwanese carrier

U-Land.

Initial plans are to introduce service to South Korea and then to decide whether

to fly to China or Taiwan. "I am unsure because I'm now talking with China,"

says Boonma. "If I get [the route from] Shanghai and Japan, I'll take it."

He says that he has secured four MD92 twin-engine jets and plans to lease turbo-prop

commuter planes to serve domestic routes. "I want to lease [aircraft] from the

French to run local flights: Phnom Penh-Siem Reap, Phnom Penh-Battambang and Phnom

Penh-Stung Treng."

Boonma is reputed to be Cambodia's richest businessman and most finicky flier. On

two occasions in the past few months, he has produced pistols when he felt that customer

service was not up to standard. On Apr 7, he shot out the front tire of a Royal Air

Cambodge Boeing 737 for losing his luggage and behaving rudely.

"They were so insolent," he told the Post afterward. "If they were

my employees, I would have shot them in the head."

The second incident occurred when an Orient Thai flight on July 30 attempted to take

off on schedule while some of Boonma's visiting associates were still on their way

to the airport. He reportedly brandished a pistol and held the plane until they arrived.

Boonma promises to strive to offer better service for business travelers, but makes

no promises. "I dare not say that my airline will be better," he says.

Kampuchea Air, run by former Cambodia International Airlines director Udom Tantiprasongchai,

now flies to Singapore three times a week and his Orient Thai charter service continues

to fly to Bangkok daily. Return fares to the two cities are $330 and $215 respectively.

Their next international destination is slated to be Hong Kong with fares similar

to those charged by RAC and Dragon Air. Company officials say that they are negotiating

to lease turbo-prop commuter planes to introduce domestic service.

Udom returned after ignominiously being squeezed out of the market on Dec 24, 1994

when RAC was made the national carrier. "They wanted me to pay money under the

table and I refused," said the outspoken Thai when he first returned. "I

told you journalists that I would return like General MacArthur. Well, here I am."

RAC, meanwhile, is assessing damages and company officials are debating whether to

continue service in the wake of losing their monopoly on domestic service. Estimates

of how much the carrier lost to looters are guarded, but managers privately agree

that the damage was severe.

"We lost all three of our mini-buses, all of our baggage carts and they even

took the stairs," laments an RAC executive. "We bought back one of the

25-seat buses in late July for $3,000 because we really needed it, but we will not

be buying anything else. It was our property to begin with."

A single Boeing 737 resumed service on Aug 19 with flights to Singapore and Bangkok.

The carrier's other 737 remains in Malaysia, pending a decision of the board. Twice-weekly

service to Guangzhao was re-launched on Aug 27.

The RAC board of directors met on Aug 25-26 in Kuala Lumpur to decide the future

of the airline, but details were not available at Post press time.

"I don't know if the Malaysian shareholders will agree to continue service,"

says Civil Aviation director Keo Sophal. "Before, they were allowed a monopoly.

Now that we have an open sky policy, I don't know."

Sophal maintains that while the concept has been accepted, the policy has not been

officially promulgated. "The Cabinet has not yet announced any clear information,"

he says.

He explains how the system will work. "Traffic can come from everywhere with

little request for authorization. They [the carriers] can increase services without

limitation, depending on the market. We should have many carriers, to increase competition.

"Now all airlines have been granted rights for cargo, mail and passengers,"

says Sophal. "We have four airlines now: Royal Air Cambodge [RAC], Kampuchea

Air, Apsara and Angkor. The last two are not finalized - not even their logos."

Domestic routes are up for grabs, even ones that do not exist. "We will let

airlines fly without going through Pochentong," says Sophal. "An airline

will be able to fly directly from Koh Kong or Sihanoukville to Siem Reap or Stung

Treng if they wish. In the future, tourists may be able to cross the Thai border

to Koh Kong and fly to see Angkor Wat or cross the Lao border and fly from Stung

Treng to Sihanoukville. It depends on the demand."

Sophal says that the policy will probably take effect in September or October and

adds that T'Beng Meanchey in Preah Vihear will be open to commercial cargo and passenger

traffic by year-end. He does not predict Siem Reap becoming an international airport

within the next ten years. "Maybe later the Ministry of Foreign Affairs will

approve it."

According to airport officials, Pochentong will be fully operational by the end of

the month. "Final technical repairs will be finished by Sept 1," says Societe

Concessionaire l'Aeroport (SCA) engineer Olivier Boschi. "The offices were looted

of course and we lost some of the lights on the runway, but the control tower was

not affected. We cannot say how much it will cost to repair." A Western diplomat

familiar with the case puts the damage at $1.2 million.

Air mail service has returned to normal according to Posts and Telecommunications

secretary of state So Khun. "International and domestic air mail is back to

normal. It is now being carried by RAC," he claims. "There are no problems."

Newspapers have not been delivered from Bangkok since July 4. Overseas Courier Services

(OCS) representatives initially blamed the lapse on 25 kg weight limitations imposed

on incoming air-cargo shipments. But according to Orient Thai director Yin Chan,

the airline's L1011s can hold 12 tonnes and there is no cargo limit imposed on individual

shipments. OCS officials were unavailable for comment.

While the airport may be open and carriers are flying in, there still remains the

question of whether tour groups will be able to obtain insurance. Luzi Matzig, tourism

director of Diethelm in Bangkok, dispels such fears. "We have no problems with

insurance," he says. "If we send tourists to O'Smach, there could be a

problem."

Other tour operators agree. "There have been no restrictions or surcharges,"

says another. "I have heard of no carriers avoiding Pochentong because of insurance

exclusions. The tower is functional and the government is providing adequate security

and safety precautions, despite the occasional outbursts from certain VIPs."