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Govt bid to revive airline

Govt bid to revive airline

The government is trying to negotiate a tie-up with China's Hainan Airways to revive

Royal Air Cambodge, whose long limp to bankruptcy has proven a national embarrassment.

Industry experts said that would prove difficult. One source said problems included

RAC's $30 million debt and dire image.

"With the airline sector now open to several domestic and international players,

competing [with that kind of baggage] would be difficult," said the source,

on condition of anonymity.

But the government is confident it will strike a deal and has told RAC's 300 staff

they will not lose their jobs, although it could take until January before the airline's

viability is known.

"We can still operate the national carrier," said Sok An, Minister of the

Council of Ministers and acting chair of RAC, October 15. Observers said RAC was

over-extended and under-capitalized from the start.

"High operating costs accumulated with each passing day and the open skies policy

created competition," said an official at Societe Concessionnaire De L'Aeroport

(SCA), which manages the country's two international airports.

Criticisms followed of gross mismanagement, unprofessional service and frequent cancellations.

An official at Siem Riep airport said that despite its schedule of 15 daily flights,

a normal day would see only half that figure.

"If it did not get enough passengers, it simply canceled the flight," he

said. Its Malaysian partner effectively shut down RAC October 16 when it confiscated

the sole remaining jet.

RAC's most public humiliation was July 2000 when a Boeing 737 waiting to take King

Sihanouk to Beijing leaked fuel on the tarmac. A livid Prime Minister Hun Sen fired

the chairman, replacing him with Sok An.

"Sok An's vow to turn around [RAC] turned into an industry joke. It continued

to incur losses and the service got even worse," said the Siem Reap official.

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