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The resort town of Siem Reap in northwestern Cambodia is breathtakingly
beautiful. It stands as the gateway to the ruins of Angkor, which was
the seat of the Khmer Kingdom from the 9th-15th centuries. The airport
has a small-town feeling—quite understated and lovely.
Phom
Penh Exclusive
Looking
for new markets remains a priority for some executives, especially after
a rather lackluster and in some quarters even sluggish 2015.
Now in 2016, uncertainty over China finding
the next big thing continues as the long predicted migration of manufacturing
to the low cost labor pool areas of Southeast Asia occurs.
Looking at the airlines, despite the apparent
continued success of Gulf operators EK, EY, QR, and others—notably
Turkish Airlines— a growing portion of their cargo business is a
trending shift from European and Asian operators to the more sophisticated
cargo products offered by these carriers.
However, further growth in terms of new
business remains a challenge as the pace of opening new gateways has also
begun to gain a regular, if slightly slowed, rhythm.
A driver affecting both ocean and air is
the slowdown in China, with its growing middle-class, which now constitutes
roughly the population of the entire USA.
Chinese workers having pulled themselves
up from the sweatshops, many with positions in the future of China—they
are off buying Buicks and other consumer goods.
Enter the efforts of the Chinese government
looking to farm out or even release some manufacturing to other, less
advanced Asian countries.
Cambodia
The Kingdom of Wonders
A recent article in The Phom Penh Post
suggests some interesting possibilities that, if realized, might bring
this ancient, often overlooked country—with its burgeoning, underpaid
population eager for an economic breakout—four square into manufacturing
and transportation,
But first we must back up a bit and look
at the air transport industry in Cambodia, which we learn from The
Post is enjoying a previously unprecedented success despite the shortcomings
in the Cambodian regulatory system, a serious lack of oversight, and a
legal system making operating an airline quite a daunting task.
Cambodia has long been known as the one
spot in Asia where airlines sprout like mushrooms after rainfall and vanish
even faster than they have started.
Here are only some airlines that have come
and gone in Cambodia: Aero Cambodia Airlines, Air Dream, Angkor Airways,
Cambodia Airlines, First Cambodia Airlines, Imtrec Airlines, Kampuchea
Airlines, Mekong Airlines, Progress Multitrade Transport PMT Air, and
President Airlines.
Notably, the carrier Siem Reap Airways
International (FT), a spin-off from the Thai-based Bangkok Airways (PG)
with Thai-trained crews and aircraft maintained in Thailand, was doomed
by the political tensions between Thailand and Cambodia. Siem Reap International
shut down its operations in 2008.
Cambodia Angkor Air (K6), owned jointly
by the Cambodian government (51 percent) and Vietnam Airlines (VN), with
planes leased from VN and maintained and staff trained in Vietnam, succeeded
Siem Reap International.
Apsara Air, IP, restructured in 2014 after
near bankruptcy and with operations recommenced in October 2014, currently
operates a lone A321.
Cambodian and Chinese investors jointly
own IP.
Some
Newer Cambodian Services
Bassaka Air, 5B, launched its maiden flight
in December 2014 and currently operates two A320 between Phnom Penh and
Siem Reap as well as Macao.
Another stronghold is 5B’s connection
with the Cambodian/Chinese Naga Corporation, which operates multiple casinos
in Cambodia; on behalf of Naga Corporation, charter flights to the Chinese
mainland fly wealthy and not-so-wealthy gamblers to Cambodia from Changsha
Hunghua (CSX) and Xi’an (XIY).
Another upstart is Cambodia Bayon Airlines
(BD), which commenced service in December 2014.
Cambodia Bayon Airlines currently serves
the Cambodian domestic market and Vietnam as its sole international destination
and operates flights between Phnom Penh (PNH), Siem Reap (REP), and Sihanoukville
(KOS) as well to Ho Chi Minh City (formerly Saigon, SGN).
As a wholly owned subsidiary of Chinese
Joy Air (JR), BD has 10 A320-200 and another 18 MA-60 on order, slated
to enter service between late 2016 and 2019.
BD will, if their ambitious business plans
come true, shake up not only the Cambodian domestic market but also gain
a significant chunk of the traffic between Cambodia and neighboring Vietnam,
Laos, and Myanmar.
Founded in 2011, Sky Angkor Air (ZA) caters
to the booming tourism trade with Korea, operating flights between Cambodia
and Singapore (SIN), Busan (PUS), Daegu (TAE), Seoul-Incheon (ICN), and
Hanoi Noi Bai (HAN) as well as operating charter flights to mainland China.
Enter
The Airports
Phnom Penh Pochentong International (PNH)
has recently seen its international terminal expanded by more than half,
making it one of the most attractive airports in Asia with a taxi-to-gate
time of less than 45 minutes. The facilities in Siem Reap (REP), home
of Cambodia’s biggest attraction, Angkor Wat, have also been upgraded
and expanded to accommodate the increasing flow of tourists—as well
as a small but steadily growing number of Cambodian domestic passengers—to
this world wonder.
The third airport in Cambodia dubbed “international,”
Sihanoukville (KOS) has also awoken from its long dormancy, owing to a
rush of European and Asian tourists flocking to some of the most beautiful
Asian beaches, which are still largely untarnished and fairly empty.
KOS was abandoned during the Khmer Rouge
regime and never reopened until 2007. Services were halted again in June
2007 after the fatal crash of PMTair (U4) flight 241, and didn’t
resume until late 2011. However, so far no international services are
operated to and from KOS.
The
Air Cargo Factor
As The Phom Penh Post pointed
out, air cargo saw a 15 percent rise to and from Cambodia, bringing the
total tonnage to 38,065 metric tons according to CAMS, the operator of
the Cambodian airports.
Growing labor unrest in Cambodia’s
all-important garment industry boosted these figures, The Post
reported.
It is important to point out that while
garments are usually shipped by sea using Sihanoukville Port, outages
caused by labor action forced a speedier means of transport, meaning air
cargo carried a considerable percentage of the exports in 2015.
Whether or not such a forced shift to the
air mode indicates any sustainable growth remains to be seen, but Cathay
Pacific (CX) feels confident enough in the Cambodian market to deploy
freighters twice a week.
EVA Air (BR) has withdrawn their biweekly
MD11 freighter after focusing on higher yields to and from the U.S.—a
strategy that might backfire, since the markets do not take kindly to
carriers jumping and abandoning each wagon as they fall in and out of
favor.
Still, the booming tourism to and from
Cambodia necessitates strong air transport links both internationally
and domestically, and carriers like K6, BD, and 5B—backed by Chinese
and Vietnamese investment capital—are in for the long haul.
Who
Are The Watchdogs?
One main issue overshadowing Cambodian
aviation is the almost complete lack of regulatory oversight exercised
by the government, a lack of safety regulations and the implementation
of internationally accepted standards, and the biggest problem plaguing
Cambodia—and its ordinary citizens—widespread, runaway corruption.
So far Cambodia has neither a labor safety
code nor a fire code, and reports about flagrant abuse by government officials
are frequent.
Growth
In Private Initiative
For example, while international hotel
chains adhere to the fire codes or standards applicable in their home
countries, most of the guesthouses and smaller hotels all over Cambodia
are unfortunately little more than firetraps.
Still, private initiative in many cases
covers what governmental regulation lacks:
FlyingTypers spoke to Hen Leat
Cheang, General Manager of the Eureka Villas Hotel, a lovely, small hostelry
in the heart of Phnom Penh City, about 25-minutes from Phnom Penh International
Airport.
The place is owned by a retired Australian
firefighter who trained Hen in fire fighting and prevention techniques.
Today Hen promotes and sells this equipment
in Cambodia and conducts classes in firefighting training.
“As the only reliable source of specialized
fire-safety equipment, we see our small business as an essential that
has been instrumental in saving lives throughout Cambodia,” Mr.
Hen told FlyingTypers. Contact: hen@eurekavillas.com
Jens
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