C AMBODIA's new national flag carrier, Royal Air Cambodge, takes to the skies on January 2, leaving Cambodian International Airlines struggling to try to get back into the market.

Royal Air Cambodge (RAC) - which takes it name from Cambodia's pre-1975 national carrier - will be 40 per cent owned by Malaysia Airlines (MAS) and 60 per cent by the Cambodian government.

The government-owned Kampuchea Airlines will continue flying, under RAC colors.

The chairman and chief executive of RAC - whose January 2 inaugural flight will be to the Malaysian capital, Kuala Lumpur - will be former Kampuchea Airlines' chairman Prince Sisowath Chivan Moniroth.

RAC will use Kampuchea Airlines' existing fleet, along with an almost new 737-400 aircraft, and two ATR 72 turbo-prop planes, provided by MAS.

The airline will initially fly to Bangkok, Kuala Lumpur, Singapore, Hong Kong, Singapore and Ho Chi Minh City, offering economy and business classes.

The deal will allow tickets for Royal Air Cambodge to be sold through MAS' worldwide sales system.

Siam Kampuchea Air - jointly owned by Kampuchea Airlines and a Thai company - is expected to stay in business.

An SK Air executive told the Post the firm, which has only one plane, would operate under a "cooperation agreement" with Kampuchea Airlines. It would fly to the Bangkok, Hong Kong and Ho Chi Minh routes.

SK Air - like the wholly Thai-owned Cambodian International Airlines (CIA) - had previously been instructed to cease operations by Dec 24.

The order from the Civil Aviation Authority had been expected for a long time but its eventual suddenness came as a surprise to many in the aviation and travel industries.

A merger of Kampuchea Airlines with a foreign airline to form a single national carrier has been expected for several years.

Singapore International Airlines signed a memorandum agreement with the government for such a merger in late 1993, but later withdrew from the project.

At one stage, Cambodian International Airlines was also negotiating for such a deal but that too fell through.

MAS stepped into the fold and CIA, which had been operating for more than two years, was advised on Dec 19 that it had to close down within 5 days.

CIA's deputy manager, Jimmy Gao, said the firm still held out hope of being permitted to fly again from Cambodia.

The company - which he said was still paying its 200 or so local staff - would talk to the Civil Aviation Authority about being allowed to resume some flights.

"It's better to have competition (for the new national carrier)...we hope to keep flying."