Debts Still Hound Defunct Mekong Airlines Owes Thousands in Debt, Employees Say

Shareholders of Cambodia’s newest airline sold the company to Malaysian entrepreneurs in July and left thousands of dollars in debts in limbo, airline employees said Tuesday.

Mekong Airlines was sold to the Malaysian-owned Aircraft Services to save the Cambodian company from being financially ruined by the regional outbreak of severe acute respiratory syndrome, former employees said on condition of anonymity.

Mekong Airlines grounded its sole Boeing 737-500 in May, suspending its 33 weekly flights to Malaysia and Hong Kong after low passenger levels failed to sustain the business.

Since suspending operations, the airline has accumulated several thousand dollars worth of debt, in the form of unpaid sal­aries, catering and fuel costs, in­vestors said Tuesday.

The airline owes the Hong Kong Center, where the airlines has its offices, at least 20 percent of $10,000 worth of rental fees, said Hong Kong financial officer Sek Buntheoun. The Hong Kong Cen­ter rented office space to Mekong Airlines for $2,000 a month, he said.

Sek Buntheoun said the Hong Kong Center is willing to immediately accept less than the total amount owed it as long as the Malaysian investors deliver the remainder in a timely fashion.

“We need them to pay some, not all. They could pay us during its full operations,” he said.

Sek Buntheoun said he is optimistic that Mekong will reopen under new owners in September, as Malaysian airline representatives visited his office Aug 15 to discuss the rental agreement.

Air Catering Co, Ltd is owed more than $30,000 in food costs, a catering employee said on condition of anonymity.

A former Cambodian employee with the airline, who asked not to be named, said about 100 dom­estic Mekong Airlines employees are owed salaries from the month of May.

The domestic staff, former employees of the now extinct national Royal Air Cambodge, said they will not demand their back pay, in the hopes of being rehired by the Malaysian investors. Em­ployees “are not rushing to ask Mekong Airlines to pay their sal­aries,” said an airline captain, who also serves in the national air force. “I can’t afford to live with the state salary of $20 a month,” he said.

Mekong owes expatriate employees about $500,000 in salaries, a high-ranking foreign airline official said on condition of anonymity Tuesday. The engineers, pilots and managers owed money currently have no plans to take legal action to collect the wages, he said.

“We will wait and see what the new investors will do. We would not want to rock the boat,” he said.

Mekong Airlines President Heath Shen was unavailable for comment Tuesday.

(Additional reporting by Kate Woodsome)

 

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