ROYAL Air Cambodge (RAC) is about to launch a subsidiary called Royal Air Services

(RAS) to fly a cargo charter route in the Kingdom within the next couple of months,

RAC chairman Vichit Ith confirmed.

But on its first anniversary, RAC is shrugging off another claim that it has unfairly

treated an old investor, because that investor says it now finds itself a competitor

and, therefore, not be to tolerated.

When RAC was launched this time last year the government controversially booted out

Udom Tantiprasongchai's Cambodia International Airlines.

Now, as RAS is born, American Tony Nigro and his company Cambodian Aerospace Services

(CAS) - which has been flying charters on a "by agreement" basis for a

year or so - has been finally told it too is illegal.

Nigro was shut down in August last year. He has since tried to get a Civil Aviation

Authority (CAA) license after being told his old agreement from the Ministry of Commerce

was not enough.

Nigro now says he is going to sue "everybody". He reckons he has lost around

$500,000 since his SkyVan cargo airplane was grounded. One of his biggest gripes

is that CAA's director Pok Sam El - who has refused to grant RAS a license - is also

a director of RAC, and therefore, Nigro says, has a vested conflict of interest.

Cambodian authorities however say there is no conflict. Many countries have flag-carriers

which have directors holding positions in other companies. Besides, they say, Nigro

was told from the start that he had to get a CAA license - and it wasn't RAC's fault

that the CAA refused to grant one.

Attempts to resolve the matter founded earlier this week after Nigro finally met

with government officials, including Prime Minister Prince Ranariddh's chief of cabinet,

Ly Thuch. That meeting, by all accounts, degenerated into a shouting match.

Nigro says that government officials "told me not to bother with [my] company

here, that we were small peanuts. They don't know nothing... hell, they won't even

talk to us".

Nigro said RAS would be doing exactly what CAS had been - maintenance, selling spare

parts, cargo runs and training.

Nigro said Ranariddh told him that there would be a position in RAS for him, "but

I've got my own company... I'm not going to work for RAS. I'll see how good RAS is

and maybe they can work for me."

Nigro said that Vietnam, whose socialist government made business there relatively

difficult for foreigners to enter, had five chartered airline companies and wanted

CAS to start a sixth. "How can they be so free, yet this so-called free [Cambodian]

government acts like this with us?"

Nigro was first introduced to Cambodia during the late 60s as a marine in Vietnam.

He returned in the early 70s, hired by one of "the [U.S.] State Department's

flaky companies" NHA ("Nixon's Hired Army"), maintaining and repairing

planes of the Cambodian and South Vietnamese airforce, he said.

Nigro is a graduated aircraft engineer, a licensed mechanic and inspector, and qualified

commercial pilot with more than 2,500 flying hours. Talking about his experiences

in different countries, he said: "I have worked with 18 different military organizations

as an advisor/consultant. Some people call it a mercenary. Six of them were actively

engaged in war... The Khmer Rouge don't scare me".

Lloyds of London hired him for difficult crash recovery and inspection jobs. He secretly

recovered a $1m Bell helicopter from a mountain top in Burma and smuggled it across

the border in a truck. Lloyds hired Nigro, calling him a "colorful character."

Nigro returned to Cambodia in 1993, in charge of maintenance and repairs to Ranariddh's

private aircraft. He says the first Prime Minister owns a four-seater TB10, a twin-engined

Cessna, a larger Cessna 421 that Nigro believes has since been given to the airforce,

and an Echo Microlite with "plastic fuel lines that's not very safe... I suggest

he doesn't fly it."

CAS was born from three separate companies operating in Phnom Penh at the time: Artic

Circle Air, which flew a SkyVan cargo airplane; Skywatch International, which provided

the pilot; and his own South East Asian Air Services, which did repairs and maintenance.

It became obvious to merge the three companies, especially after the suggestion of

Ranariddh.

"[Ranariddh] was in a very good mood, sitting on the airfield one night with

me and [Capt] Don Ragsdale [of Skywatch]. He was happy with his aircraft and he said

to us why don't we make Cambodia our home and open a company here. He said he would

help and support us. We said OK," Nigro says.

CAS was formed with a Cambodian partner, Brigadier-General Tes Chanthan. Chanthan

- who was an airforce deputy commander in charge of training pilots - died on March

7 last year when his P-52 surveillance plane crashed after a malfunction in Kompong

Thom. He was replaced as 51 percent owner of CAS by Princess Norodom Sosony, wife

of air force chief Lt.-Gen. Norodom Vatvani.

Ragsdale, Nigro said, was the first to find business in Cambodia too difficult to

continue, eventually leaving and being replaced by Artic Air boss Herb Terry.

Terry owns 25 airplanes on his Alaskan route and "has a bank account into the

eight digits. We have other financial backers... we have endless resources... we

are not small peanuts and I object to that reference," Nigro said.

CAS's 12,000 lb "peanut" - the SkyVan - carries cargo for any customer,

especially to hard-to-reach places like Preah Vihear and Ratanakiri.

Originally CAS wanted to sell the SkyVan but because the government couldn't afford

to buy it, it was agreed that they could rent it anytime they wanted. CAS charters

have been used by NGOs, the government and the military. Once they carried 600 kgs

of money, and other cargoes have included food, troops, ambulances and generators.

The planes he understood RAS were to buy were not ideal for cargo routes that CAS

could better serve, he said.

CAS has even been refused permission for routine maintenance flights, Nigro said.

The half-million dollar plane costs more than $12,000 a month in insurance and payments:

Nigro said CAS had already lost close to $500,000.

Nigro said he had been able to talk briefly to Ranariddh once. The Prime Minister

said that CAS was shut down because it only had permission to sell spare parts, he

said.

"I was also told that RAC complained about us being a charter company, but they

said that was not so. I asked for a meeting to clarify this but [RAC] would not meet

us.

"Herb wants out. He's disgusted with the country. I'm disgusted but I want to

bring this to a head," he said.

"I'm hoping King Sihanouk will see our plight and realize what we are doing

[for the country], or perhaps the second Prime Minister," he said.