Bassaka Air has said it plans to continue serving the Cambodian domestic market, bucking analyst predictions that the airline would abandon this increasingly competitive air space once it secured a licence to operate in the more lucrative Chinese market.

“[We] have no plans to stop [domestic flights], we may even increase flights during peak season,” said Rodante Ponio, commercial services manager at Bassaka Air.

The Chinese-backed Cambodian airline launched scheduled service in late 2014 with daily flights from Phnom Penh to Siem Reap using two Airbus 320-200s leased from Hong Kong-based hotel and casino operator NagaCorp.

Its management stated at the time that the airline would seek a licence to serve the Chinese market, tapping into the vast pool of Mainland Chinese gamblers forced to go abroad to circumvent local restrictions on gambling.

After testing the waters with charter flights, Bassaka added scheduled service from Phnom Penh to Macau in March 2015, working with junket operators to deliver Chinese gamblers to the NagaWorld casino in Phnom Penh. A licence to operate flights to Mainland China followed last January.

According to Ponio, Chinese authorities approved Bassaka’s request to operate flights to Changsha and Xi’an. Scheduled service to the two Chinese provincial capitals began January 21, with flights operating twice weekly using the same A320s the airline operates on its domestic routes.

Analysts at the Australia-based Centre for Aviation (CAPA) expected the licensing would see Bassaka abandon its domestic routes in favour of the Chinese market.

“Domestic services between Phnom Penh and Siem Reap was always considered a temporary route for Bassaka to build flight hours until it can secure approval to launch services to China, its main intended market,” CAPA said in a report released last February.

“Bassaka will likely suspend Phnom Penh-Siem Reap services as it expands in China as it never intended to compete in the domestic market,” it added.

Four carriers operate domestic commercial routes in Cambodia, including Cambodia Angkor Air, Sky Angkor Airlines and Bayon Airlines and Bassaka Air.

A price war on the main Phnom Penh-Siem Reap route in 2015 saw fares as low as $1 plus tax, but the cutthroat pricing led Bayon and Sky Angkor to scale back domestic service and focus instead on international routes.

Bassaka Air currently flies between the two Cambodian cities for as little as $12 plus tax.

Despite questionable profitability, Ponio insisted the airline has no intention of abandoning its domestic operations.

“Our load factor is steadily improving with our present fare structure,” he said, adding that the flights are popular with Chinese tourists.