Contributor - Asia

Jennifer Meszaros

Despite a progressive shift toward deregulation and an influx of airline reforms, several Chinese investors are moving beyond their home turf and establishing&nbsp;new entrants on foreign soil. Cambodia State Secretariat of Civil Aviation spokesman Sinn Chanserey Vutha&nbsp;told AIN that four Chinese-backed carriers—KC International Airlines, Cambodia Airways, Domrey&nbsp;Angkor&nbsp;Airlines,&nbsp;and MJ Airlines—have reached various stages of applying for their air operator certificates (AOC) with plans to launch late this year or early next year.

 


If approved, the new entrants would bring the tally of Cambodia’s airlines to 11, a large number for a relatively small market consisting of roughly 8 million passengers.

 


“There are various challenges to setting up an airline in China, challenges that are not present in Cambodia," said Vutha. ‘‘With no foreign ownership control, Cambodia is very business friendly and an appealing market for aviation investors.’’

 


In recent years, Cambodia’s liberalized regulatory environment has enabled Chinese groups to launch airlines and/or forge joint ventures with Cambodian investors.

 


In 2014, two Chinese-backed carriers launched services: Cambodia Bayon Airlines—a wholly owned subsidiary of Bayon Holdings that enjoys financial backing from Aviation Industry Corporation of China’s Joy Air, and Bassaka Air, a joint venture between China International Travel Services and Hong Kong-listed NagaCorp.

 


Last year, two more Chinese-backed airlines launched operations—JC International, which operates a small fleet of five Airbus A320s, and Lanmei Airlines, which leases two A321s and one A320.

 


“Based on previous experience, investors must demonstrate that they have $25 million to $30 million for the first three years to cover operating costs,” said Vutha. “This does not include aircraft purchasing, and information, communication, and technology costs.’’

 


Like their predecessors, the new entrants concentrate on capturing the growing inbound Chinese travel market, which represents roughly 22 percent of Cambodia’s total passengers. Initially, the proposed startups must fly to other markets because Chinese regulators require foreign airlines to complete six months of flight and 1,000 cycles outside of China.

 


Overall, China has invested more in foreign airlines than any other country.

 


One particularly active investor—China’s HNA Group—either owns or holds stakes in 10 foreign airlines, including Hong Kong Airlines, Hong Kong Cargo, Hong Kong Express, Ghana’s Africa World Airlines, France’s Aigle Azur, Azul Brazilian Airlines, TAP Air Portugal, Virgin Australia, South Africa’s Comair, and Turkey-based&nbsp;MyCargo Airlines.

 


Smaller players such as China’s Spring Airlines maintain a joint venture in Spring Airlines Japan. China Eastern holds a 10 percent stake in Air France-KLM and Air China holds minority stakes in Cathay Pacific, Cathay Dragon (via its stake in Cathay Pacific) and a 31 percent share in Tibet Airlines. In turn, Lhasa-based&nbsp;Tibet Airlines holds a 49 percent stake in Himalaya Airlines.

 


Non-airline investors include China’s Henan Civil Aviation and Investment Company, which&nbsp;owns a 35 percent share in Luxembourg’s Cargolux. Chinese investment group CEFC China Energy holds a 49.9 percent stake in Czech charter company Travel Service, which owns 98 percent of Czech Airlines.

 


Meanwhile, China’s Hualing Group owns a clutch of investments in Georgia, including MyWay Airlines. The new startup recently launched its first charter flight from Tbilisi to Tehran with plans to offer scheduled international flights from May 2018.

News about commercial airlines, including regulations, aircraft orders, safety, acquisitions, and mergers.

Chinese Investment in Foreign Airlines Proliferates

HNA Group stands among the most active 

2024 Corporate Aviation Leadership Summit

Charles Alcock

News and developments about airplanes, helicopters and unmanned air vehicles used in all varieties of operations, including airlines, military, business, commercial, general aviation and private.

New developments at airports including regulations and noise issues; legal disputes; openings, acquisitions and mergers.

Britain's new government is under pressure to invest in public infrastructure

How Regional Air Mobility Could Boost the UK's Strained Transport Network

News about environmental issues relating to aircraft operations, including noise issues, emissisions, and regulations. See Fuel for biofuel.

Danish charter and scheduled operator could buy up to 15 of the electric seaplanes

Nordic Seaplanes Signs for Elfly's Noemi Electric Amphibious Aircraft

Odys' blown-wing design is being developed for both uncrewed freighter and piloted airliner roles

Fiji Airways Plans To Connect Pacific Islands with Laila VTOL

Scotland-based regional airline aims to achieve zero carbon emissions

Loganair and Heart Team To Decarbonize UK Domestic Flights

News and issues regarding all manner of civil and military rotorcraft and their powerplants, including helicopters, tilt rotors and unmanned air vehicles.

UK green start-up airline wants to operate domestic services with zero carbon emissions

Ecojet Plans To Operate Arc Aerosystems' Linx P9 Hybrid Helicopter

Cathy Buyck

News and issues relating to international air transport and cargo carriers, national airlines and regional airlines, including aircraft, engines, personnel, acquisitions, accidents, safety, security and training.

The Boeing electronic flight bag solution will support the low-cost carrier’s 737NG and Max fleet

Ryanair to Use Jeppesen FliteDeck Pro 5.0 EFB 

News and developments about aircraft engines, including turbofan, turboprop, turboshaft and piston.

More In Airlines

How Regional Air Mobility Could Boost the UK's Strained Transport Network

Britain's new government is under pressure to invest in public infrastructure

Nordic Seaplanes Signs for Elfly's Noemi Electric Amphibious Aircraft

Danish charter and scheduled operator could buy up to 15 of the electric seaplanes

Fiji Airways Plans To Connect Pacific Islands with Laila VTOL

Odys' blown-wing design is being developed for both uncrewed freighter and piloted airliner roles

Loganair and Heart Team To Decarbonize UK Domestic Flights

Scotland-based regional airline aims to achieve zero carbon emissions

Ecojet Plans To Operate Arc Aerosystems' Linx P9 Hybrid Helicopter

UK green start-up airline wants to operate domestic services with zero carbon emissions

Ryanair to Use Jeppesen FliteDeck Pro 5.0 EFB

The Boeing electronic flight bag solution will support the low-cost carrier’s 737NG and Max fleet

EVA Air Selects GEnx Engines to Power Additional Boeing 787s

The Taiwanese airline already operates 15 GEnx-powered 787s

Wilbur Air Plans to Operate Crisalion's Integrity eVTOL in Australia

Wilbur Air is a subsidiary of advanced air mobility ground infrastructure group Skyportz

AIN Products

SUBSCRIPTIONS

RESOURCES

ABOUT AIN