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New kid on the block ruffles airline feathers

New kid on the block ruffles airline feathers

newkid.jpg
newkid.jpg

At the opening ceremony for Siem Reap Airways, a subsidiary of Bangkok Airways

DOMESTIC airlines have expressed concern at the November 3 inaugural flight of Siem

Reap Airways International (SRA), saying the market is too small for a new airline.

With three domestic airlines - Royal Air Cambodge, President Airlines and Phnom Penh

Airways - already plying the Siem Reap-Phnom Penh route, SRA competitors say the

addition of a fourth carrier could be disastrous.

"We could lose [business] because there is now one more [airline]," said

Ou Serey Sopheap, a Senior Ticketing Manager for President Airlines. "[Cambodia's

domestic airline industry] is like a plate of food for one person... It is not enough

for one or two additional people."

Sopheap's complaints are echoed by Kong Sambath, Commercial and Marketing Director

for Phnom Penh Airlines, who says SRA will damage an already narrow profit margin

enjoyed by domestic carriers.

"The Cambodian [domestic airline] market is very small, but there are many airlines,"

Sambath told the Post. "It is difficult to compete with ticket prices set at

$59 [one-way] and $109 for round trip from Phnom Penh to Siem Reap."

SRA, whose fleet consists of a solitary 70-seat ATR-72 leased from its parent company,

Bangkok Airways, is hoping to capitalize on a projected exponential increase in the

number of tourists visiting Cambodia over the next decade.

"We are not optimistic, but probably in about eight years one million people

will come to visit Siem Reap [annually]," explained SRA Chairman Prasert Prasarttong-Osoth.

A further irritation for Sambath, however, is his allegation that SRA and its parent

company, Bangkok Airway,s has been given preferential treatment by the Government

that allows it an unfair advantage over current domestic carriers.

"Before the Government approved SRA, I wrote a letter to the Cabinet of the

Council of Ministers and also the State Secretariat of Civil Aviation [SSCA] to ask

permission for [President Airlines] direct flights from Bangkok to Siem Reap, but

they didn't approve it," he said. "The Government should be encouraging

Khmer-owned airlines."

For Government spokesman Khieu Thavika, however, the complaints from Phnom Penh Airways

and President Airlines are not reasonable in a modern market economy.

"RAC, President Airlines and Phnom Penh Airways are not monopoly companies,"

Thavika said. "Any airlines can come to do business in Cambodia ... Other airlines

will continue if they have good service."

Other airlines are apparently on the way.

According to SSCA Director General Keo Phal, Lao Aviation, Shanghai Airlines and

Hong Kong's Dragonair are expected to take advantage of Siem Reap's official "open

skies" policy and inaugurate direct flights to Siem Reap from abroad by the

end of 2001.

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