PAL, Royal Group of Cambodia form international airline venture

MANILA, Philippines - National flag carrier Philippine Airlines (PAL), a joint venture between taipan Lucio Tan and diversified conglomerate San Miguel Corp. (SMC), has tied up with the Royal Group of Cambodia (RGC) to establish its first international airline venture known as Cambodia Airlines. 

PAL would own a 49-percent stake in Cambodia Airlines while RGC chaired by Neak Oknha Kith Meng would control the airline with a 51-percent interest.

 PAL and SMC president and chief operating officer Ramon S. Ang and Kith Meng signed the joint venture agreement in Phnom Penh Tuesday evening. 

Cambodia Airlines, which intends to initially lease two Airbus A321s for international routes and two Bombadier Dash 8s for domestic flights, is expected to compete head on with national flag carrier Cambodia Angkor Air. 

Ang said in a statement that the joint venture is another strategic move in SMC’s continuing diversification into fast-growing industries and economies.

“I would like to thank the Cambodian government and our partner, Royal Group, for this opportunity to help introduce a national carrier that will boldly carry the flag of your country throughout the world,” Ang stressed. 

He pointed out that PAL is confident that Cambodia Airlines would play a significant role in helping spur more economic growth and tourism for both the Philippines and Cambodia. 

“It is also a testimony of our commitment to make a difference in any business that we participate in – whether it be in the Philippines or internationally,” Ang adds. 

Aviation magazine Routes News quoted Kith Meng as saying that the new airline is looking to capitalise on Cambodia’s rapidly growing economy and air traffic numbers, as well as on the dynamic Association of Southeast Asian Nations (Asean) region, which has plans for an integrated economic community by 2015. 

“The benefits of partnering with Philippine Airlines are, initially, we will see increased arrivals from amongst 94 million Filipinos,” he added. 

“Later, as our route network expands, we will see a greater number of business [and] tourist arrivals from Asean and East Asia. The increased travel into and out of Cambodia will foster increased commerce. In turn, the greater FDI in Cambodia can be expected...with the arrival in 2015 of the Asean economic community.” 

It also quoted Royal Group chief finance officer Mark Hanna that the key benefit would be Phnom Penh’s only direct flight to Manila that would link up with PAL flights going to the US and elsewhere.

 Although routes had not yet been firmly decided upon, domestic flights could begin as early as June this year and international flights are expected to begin in October, he added.