The government quietly privatized Kampuchea Airlines last month, ending its eight-month joint venture with controversial Thai businessman Udom Tantiprasongchai.
The move leaves financially troubled Orient Thai as the sole owner of the struggling airline, which has temporarily suspended nearly all of its regular routes because of a slump in ticket sales.
Kampuchea Airline’s chairman, Yim Chan, said Tuesday the company had pushed to be released from the joint venture with the government. The company believes as a private airline it will have more freedom to compete in the crowded market.
“All the other airlines are private except Royal Air Cambodge,” said Yim Chan. “The government approved [the privatization] because of the commercial benefits.”
The government owned 51 percent of Kampuchea Airlines. Yim Chan would not discuss the terms of the buyout.
Government spokesman Khieu Kanharith on Tuesday said he was unaware the two prime ministers had signed a subdecree approving the March privatization, seen by The Cambodia Daily. He suggested the information was incorrect and it was the government’s other joint-venture airline, RAC, that was privatized.
An adviser to Second Prime Minister Hun Sen, Om Yentieng, also said he did not know the government had withdrawn from the partnership.
The joint venture was signed last July following the factional fighting, when Hun Sen decided to end RAC’s monopoly and restart Kampuchea Airlines, which had ceased operations in 1994. RAC, whose top officials were close to deposed first prime minister Prince Norodom Ranariddh, had lost more than $24 million since its inception in 1994.
Whether Kampuchea Airline’s new ownership will help the carrier remains to be seen.
Following its decision to suspend its Kuala Lumpur service in February, the airline informed local travel agents late last week that the Singapore route would also be suspended temporarily.
The only regular service route still operating is Bangkok-Phnom Penh-Hong Kong on Mondays and Thursdays, according to Yim Chan. The company will continue flights to Macau on a charter basis, he added.
The decision to suspend the flights, the chairman said, is because of a slump in passengers. “When the number of passengers increases, we will begin flying again,” he said.
The new reduced schedule has left some of the city’s travel agents fuming. Customers who had bought tickets to Singapore, or to Hong Kong on days that now no longer have flights, cannot get refunds or have their tickets endorsed onto other airlines. If passengers don’t want to fly to Hong Kong on a Monday or Thursday, explained one ticket agent, they are out of luck.
“I have many customers complaining and they want refunds from me,” said one travel agent. “I will lose hundreds of dollars.”
Several agents said Monday they had stopped recommending customers fly Kampuchea Airlines, because the company frequently canceled its flights.
Yim Chan said he was aware of the complaints but believed only a few customers were affected.
For some travel agents in Phnom Penh, this is the second time they have been stuck with unusable tickets from an airline owned by Udom, who is managing director of Bangkok-based Orient Thai.
In December 1994, his carrier Cambodia International Airlines, which was partnered with the previous incarnation of Kampuchea Airlines, was abruptly closed by the government to make way for RAC. The closure left thousands of ticket holders stranded and agencies were thousands of dollars out of pocket.
RAC accepted a few of the airline’s tickets, but most agents never received refunds.
An agent said his losses from Cambodia International Airlines and Kampuchea Airline tickets ran in the thousands.
“I will complain to the government and ask the government to fix it,” he said.
But a senior official at the State Secretariat of Civil Aviation, Pan Chanlaroath, said it was the company’s responsibility to deal with the problem.
