Kampuchea Airlines, the national flag carrier, will begin flying a Boeing 737-200QC

twice weekly to both Singapore and Kuala Lumpur from Phnom Penh beginning Jan. 11

in conjunction with its Thai joint venture partner S.K. Air (Siam Kampuchea Air),

an air charter firm based in Bangkok.

Cambodian landing rights have already been secured for Hong Kong and Taipei and will

be used after the conclusion of ongoing negotiations to lease a second 737-200, according

to Pricha Sorn-damrih, S.K. Air's sales director in Bangkok.

The expansion, which comes a month after S.K. Air-which essentially runs the international

operations for Kampuchea Airlines- deployed a 737-200QC aircraft on its original

Bangkok-Phnom Penh route.

This aircraft, leased from Sabena Airlines for six month periods, replaced one of

two Soviet-built Tupolov-134 jets the air firm employs on the Bangkok-Phnom Penh

route for its 10 weekly flights.

The displaced T-134 will in turn be redeployed on the Phnom Penh-Siem Reap route

used by an increasing number of tourists going to visit the famous temple complexes

that includes Angkor Wat.

This route is currently being serviced by two propeller Antonov-24s, also built by

the former Soviet Union. Besides increasing seat capacity, the switchover will allow

for quicker spare parts delivery from the Tupolov factory in Vietnam.

The 109-seat Antonov is using Cambodian landing rights on all four new destinations,

according to Pricha, which is likely to put a crimp into similar expansion plans

being hatched by Cambodian International Airlines (CIAS).

This airline is also a Cambodian carrier in a 70/30 joint venture with Phnom Penh's

Department of Civil Aviation, but in a highly-political move the government has recently

tried to renege on its 20-year contract.

CIAS purchased a 737-200A in November to replace one the company had been leasing

for deployment on the Bangkok-Phnom Penh route.

The firm decided to switch over from a lease to purchase after a reapportionment

of landing rights, and, as a result of a readjusted bilateral agreement with Thailand,

CIAS saw its flights reduced from 10 to six each week.

In the new bilateral agreement, each side is allowed 1,000 seats per week.

The two Thai carriers-Thai Airlines, using a 737-400 with 146 seats, and Bangkok

Airways which is flying a Fokker-100 with 107 seats-fly round trips seven days a

week. The Tupolov-134s have 72 seats, while CIAS's Boeing 737-200s have 100 seats.

CIAS has applied to fly seven days a week but S.K. Air's Pricha says his firm will

file to expand in January from its current 10 to 11 weekly flights.

"If we go up one, they will have to go down one," says Pricha.

A subsidiary of Malaysian Airline has reportedly put up 50 percent of the operating

costs incurred on the KL/SPE routes, in exchange for a similar cut of the profits.

The other 50 percent goes to Kampuchea Airlines, while S.K. Air retains all earnings

on the Bangkok-Phnom Penh route. Load factors are currently higher on the Bangkok

route than the southern routes. An industry source says it will be a challenge to

use one aircraft for three different destinations.

Meanwhile, CIAS managing director Udom Tantiprasongchai reiterated his interest to

modernize and expand the Pochentong Airport terminal, despite claims by the State

of Cambodia officials that the Thai businessman had reneged on these plans.

Udom said he submitted detailed blueprint design plans in February 1992 and several

follow-up letters but he has still not received official approval to proceed.

"But if they come back to me today and say you can build, I will. I am prepared,"

said Udom on Dec. 25.

"But they have to give me assurances that there will be no more interference

and that they will honor the contract," he said.

CIAS has spilled roughly U.S. $2 million in red ink since starting the operation,

some of which is due to interference from Cambodian officials who favor the joint

venture between S.K. Air and Kampuchea Airlines, Udom charges.