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Capital A to launch AirAsia Cambodia as it resumes growth

Parent of budget airline kicks off expansion plans following the pandemic

Capital A, parent of Malaysia budget carrier AirAsia, said its AirAsia Cambodia joint venture would launch in the second half of 2023.   © Reuters

PHNOM PENH (Reuters) -- Capital A, the parent of Malaysian budget carrier AirAsia, plans to launch a new airline in Cambodia with a domestic partner as it resumes expansion plans put on hold during the pandemic, its chief executive said on Friday.

Capital A said AirAsia Cambodia, a joint venture with Sivilai Asia, would launch in the second half of 2023.

AirAsia Cambodia is expected to have a fleet of 10 to 12 planes within a few years after it starts flying, Capital A Chief Executive Tony Fernandes told reporters in Phnom Penh.

"We wanted our growth story to really start today in Cambodia. It was a long time coming," he said in reference to the need to ground most of the carrier's fleet of 210 planes when demand plunged during the pandemic.

AirAsia Cambodia, to be led by Cambodian national Nam Vissoth, will focus on growing inbound tourism from places including China, South Korea, Southeast Asia and India, Fernandes said.

The fully paid-up capital requirement will be $25 million, with AirAsia to use internal funds for its share of the equity investment, Capital A said.

Partner Sivilai was established in January as a consultancy that aims to operate hospitality businesses in Cambodia, it added.

Capital A is also looking to start a new airline in Vietnam to join its existing carriers based in Malaysia, Thailand, Indonesia and the Philippines, Fernandes told Reuters last week.

The company plans to combine its AirAsia aviation business with long-haul offshoot AirAsia X as part of a corporate restructuring designed to shed its status as a financially-distressed firm. The airline brands, however, will remain separate.

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