Philippine Airlines is still keen on establishing a new Cambodian flag carrier with local telecommunications, banking and property tycoon Kith Meng, company president Ramon S. Ang said in a recent interview.
Ang noted that the deal had been delayed due to the uncertain political climate following the conclusion of national elections in Sept. that saw Cambodia’s long-serving prime minister Hun Sen reelected for another five years.
Ang noted that they hoped to close talks by next year for an agreement that had been postponed at least twice this year.
PAL and Meng’s Royal Group were supposed to finalize the transaction on Oct. 15, which was already extended from the original July 15 closing date.
The plan to form a new carrier, which will be called Cambodia Airlines, opens up opportunities for PAL in one of the region’s fastest growing economies.
PAL, which continues to struggle financially, said the transaction was also expected to eventually translate to higher revenues.
The board of PAL in April agreed to invest 49 percent in the venture, to be called Cambodia Airlines Co. Ltd.
The airline is 100-percent owned by Inter Logistics (Cambodia) Co. Ltd. of Meng’s Royal Group of Companies.
The transaction was valued at $10 million and called for a 10-percent down payment due before closing, a previous filing showed. The balance will be paid upon demand by the board of directors of Cambodia Airlines.
If successful, the new airline will compete with Cambodia Angkor Air, which is controlled by the Cambodian government in partnership with Vietnam Airlines, and other regional carriers.
Aviation analyst earlier questioned the small start-up costs for Cambodia Airlines but Ang said PAL, which has an ongoing $9.5 billion re-fleeting strategy involving 64 mid-range and long-range Airbus planes, was prepared to deploy as many as 22 aircraft to support Cambodia Airlines.