A battle between two groups trying to establish a new carrier in Cambodia has been stepped up, with China's Hainan Airlines agreeing to launch Air Cambodia in partnership with the Phnom Penh government.

Fast-growing Hainan, part-owned by an investment fund linked to US financier George Soros, says it will hold 49% of the new carrier. The Cambodian government will hold 41%, while a company identified as Cambodia CTG will have 10%.

The Chinese carrier, which claims to be the fourth-largest airline grouping in China, says its new airline will be the only Cambodian operator approved for international flights.

Another planned start-up carrier, Mekong Airlines, has, since Hainan's announcement, been seeking clarification from the Cambodian government on what the deal may mean for its plans. Mekong is backed by a group of Australian industry veterans. It was aiming to launch international services from Phnom Penh last month, but was forced to delay its plans. It remains confident, however, that it will still win final launch approval soon.

Mekong business development manager Anthony Sandford says it is considered unlikely that Air Cambodia will be given exclusive rights to operate international services, as the country has an open-skies policy on air services. Such a designation would also affect other small Cambodian carriers that operate international services such as Siem Reap Airways, he adds.

Hainan is known to have been in talks with the Cambodian government on the establishment of a new carrier since the October collapse of national airline Royal Air Cambodge (RAC), which was a joint venture with a Malaysian company. Mekong has also been working on its own launch plans for months and says an air operator's certificate was secured at the end of December. It hopes to operate on international routes formerly served by RAC. It also plans domestic flights between Phnom Penh and Siem Reap.

Source: Airline Business