Capital A aiming to capitalise on Cambodia with latest AirAsia venture
AirAsia Cambodia has launched international operations and is well positioned to develop in a market with strong potential and low LCC penetration.
After domestic debut, AirAsia Cambodia expands into international market
Capital A's latest venture, AirAsia Cambodia, operated its first international service to Kuala Lumpur on 01-Aug-2024, just three months after launching operations as the newest airline in Cambodia.
The low cost carrier was established through a joint venture between AirAsia Aviation Group and Sivilai Asia in Dec-2022. AirAsia Cambodia received its air operator's certificate in Apr-2024 and launched daily Phnom Penh-Siem Reap and daily Siem Reap-Sihanoukville services with a fleet of two A320 aircraft.
The inaugural Phnom Penh-Kuala Lumpur flight recorded a 99% passenger load factor, which CEO Vissoth Nam described as "extremely encouraging" for the start up. AirAsia Cambodia intends to increase frequency on the route from seven to 14 times weekly from 09-Sep-2024, indicating confidence in the route's viability.
AirAsia Group only low cost operator on Phnom Penh-Kuala Lumpur route
According to the CAPA - Centre for Aviation Route Capacity Analyser and OAG schedules data for the week commencing 07-Aug-2024, AirAsia Malaysia, Malaysia Airlines and Cambodia Airways also operate between Phnom Penh and Kuala Lumpur, making AirAsia Group the only low cost operator on the route.
The lack of LCC competition could give AirAsia Cambodia room to grow the market by stimulating demand with lower fares.
LCCs account for only 22% of Cambodia's international seat capacity for the week of 07-Aug-2024, suggesting significant scope to capture market share from full service airlines.
Cambodia international seats by business model, w/c 05-Aug-2024
Cambodia's top international markets by departing seats are Thailand, China, Vietnam and Singapore, suggesting these could be the targets of any future expansion by AirAsia Cambodia.
Cambodia international departing seats by country, w/c 05-Aug-2024
Entering these markets would expose the new airline to competition from LCCs outside the AirAsia Group, notably from Jetstar Asia, Spring Airlines, Thai VietJet and VietJet Air.
'Huge economic potential' in Cambodia; Singapore and Vietnam could follow
Capital A CEO Tony Fernandes has highlighted Cambodia's "huge economic potential" as a compelling reason for the launch of the new airline, noting that AirAsia Cambodia underscores the group's "profound grasp" on the ASEAN market.
He later announced that Capital A is seeking to establish LCCs in Singapore and Vietnam as well, a sign this grasp could tighten around the region.
With Capital A's track record of success in the low cost space in Southeast Asia, AirAsia Cambodia is poised for stability as a new market entrant.