Logo of Phnom Penh Post newspaper Phnom Penh Post - CIA moves in on Lao market

CIA moves in on Lao market

CIA moves in on Lao market

C AMBODIAN International Airlines (CIA) is about to take a 40 percent stake in

Lao Aviation (LA), managing director Udom Tantiprasongchai said on the eve of

his carrier's inaugural flight to Vientiane.

According to Udom, CIA

should have approval from the Lao government to inject $3 million into their

flag carrier by the time the Post is published.

LA is currently run as a

joint venture between the communist authorities and a private company called

China Travel Services.

CIA is to take delivery of two newly-acquired

Boeing 727s at the end of the month, Udom said, adding that he has options on

six 737s.

One of the 737s is to be leased to LA under his proposals which

also include plans to refurbish Vientiane's airport terminal.

CIA

conducted a high-profile inaugural flight to Vientiane on July 6 and will run a

weekly service on Wednesdays, with an option to go twice-weekly with Saturday

flights during the peak tourist season. Under its agreement with the Lao

government CIA is keeping its fares at the same level as those of LA, $150 one

way.

Udom denied that his planned link up with LA would keep ticket

prices high. He said: "Many airlines are looking to have joint ventures, it is

the way forward. Costs can be reduced by sharing them between airlines and that

can lead to lower fares."

The inaugural flight was filled to capacity by

Cambodian aviation officials, tour operators and journalists but Udom admitted

that it is likely to be several months before the route attracts enough

passengers to turn a profit.

During a brief stopover in Vientiane, Udom

also revealed that he had been on a scouting mission to Europe to investigate

the possibility of starting flights to London and Paris from Phnom Penh before

the end of the year. He said he was considering buying a three-engined

wide-bodied Lockheed Tristar to service the route, with a stopover in Dubai.

Thai entrepreneur Udom adopted a bullish stance despite continued

uncertainty about the future of the Royal Government's project to revive the old

flag carrier Royal Air Cambodge (RAC).

A deal between the government and

Singapore International Airlines, which would have caused CIA to stop flying,

has been called off.

But new Kampuchea Airlines chairman Prince Sisowath

Chivanmonirak said his company may transform itself into RAC without any outside

help and refused to speculate on CIA's future.

Udom said he had already

been to pay his respects to Prince Chivanmonirak and stuck by his company's

announcement that it is also involved in efforts to finally get RAC off the

ground.

More long term plans are being formulated by Udom to build a

maintenance center in Vientiane for his aircraft and to run a side business

refurbishing older US airliners for sale to the Russian and Chinese

markets.

There was no problem finding skilled aircraft mechanics in Laos,

Udom said, pointing out that hundreds were trained by the US to maintain their

"secret" airline Air America during the war.

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