Cambodian Newcomer Set To Take Off with MA-60s

by  JENNIFER MESZAROS

October 3, 2014, 3:35 AM

Start-up carrier Cambodia Bayon Airlines in late August inked the largest-ever international contract for Xi’an Aircraft MA-60 turbopropsafter reaching terms on a deal with state-controlled aerospace conglomerate Aviation Industry Corporation of China (Avic). Valued at $450 million at list prices, the contract includes a firm order for two MA-60s and a letter of intent for 18 more over five years. Avic has received commitments for some 270 MA-60s, almost 100 of which it has delivered.

Bayon expects to take delivery of two MA-60s by year-end and plans to introduce 10 Airbus A320s over the next five years. Holding registered capital of $100 million, the wholly owned subsidiary of Bayon Holding Ltd. enjoys financial backing from Avic’s Joy Air Holding. Established in June, Bayon awaits a response to its application for an air operator certificate from Cambodia’s Secretariat of State for Civil Aviation. Headquartered in Cambodia’s capital, Phnom Penh, the carrier intends to launch domestic service by December or January.

Bayon plans first to fly between Phnom Penh to Siem Reap and from Siem Reap to Sihanoukville, a Cambodian coastal city, before expanding internationally to China, Thailand, Vietnam and Laos. The carrier plans to use the 10 Airbus A320s on international routes and wants to expand eventually to Japan and Korea.

Once certified, Bayon will be the second carrier operating domestic service in Cambodia. Currently, only Cambodia Angkor Air–a joint venture between the Cambodian Government and Vietnam Airlines–flies domestically. Angkor Air offers 40 weekly frequencies from Siem Reap to Phnom Penh and one daily flight on the Siem Reap-Sihanoukville route. A lesser known carrier, Skywings Asia Airlines, provides international and charter services out of Siem Reap.

Bayon’s entry into the market would appear to come at an opportune time. As one of the world’s most rapidly burgeoning aviation markets, Cambodia has enjoyed strong growth since 2010. While passenger numbers have suffered somewhat as a result of continuing political instability in Thailand and rising anti-Vietnamese tensions in Cambodia, overall the total number of visitors grew by 10.3 percent in the first half of this year.

Phnom Penh’s international traffic climbed by 10.1 percent in the second quarter compared with the same period last year, while Siem Reap saw gains of 9.9 percent. Domestic traffic between Siem Reap and Sihanoukville soared by 144 percent.

With no foreign ownership restrictions, Cambodia has become an attractive market for investors. The nation has seen a rapid expansion of cross-border Chinese traffic, four providers of which–China Eastern, China Southern, Spring Airlines and Xiamen Airlines–operate year round. In early March, China and Cambodia signed an open-skies agreement scheduled to take effect next year.