Siem Reap’s $1,000 Landing Fee Hikes Costs For Airlines

Cambodia’s aviation regulator is imposing a royalty fee of $1,000 for almost every flight that lands at Siem Reap International Airport, a practice that airlines said is pushing up their costs, and which is also against an international aviation convention.

While airline officials say the $1,000-per-landing royalty charge has been in place for years, officials at the State Secretariat for Civil Aviation (SSCA), the state regulator, and Ministry of Finance denied knowledge of the fee, which would amount to millions of dollars in revenue for the government every year.

“There is a royalty charge,” Abdul Karim, country manager for Malaysia Airlines in Cambodia, said yesterday. “All these charges are handled by [our] headquarters” in Kuala Lumpur, he said.

Officials at several other airlines that fly into Siem Reap from abroad all confirmed the payment of $1,000 to the SSCA for each of their flights that land at the busy airport, which receives more planes than Phnom Penh. The officials also said the $1,000 fee comes on top of ordinary landing fees imposed by Cambodia Airports, the national airport operator.

“$1,000 per flight,” said Tieng Sokuntheary, an administrative employee at Korean Air’s office in Cambodia. “As I heard from Civil Aviation, it’s because the flight is not in the capital.”

Hansoo Tan, country manager for Silk Air, a regional subsidiary of Singapore Airlines, said the carrier has been paying the royalty since it began operating in the country 12 years ago.

“In Phnom Penh, they don’t impose such a fee,” Mr. Tan said, adding that billing and invoicing is handled by the SSCA.

Other airlines were not so forthright about the Siem Reap royalty.

“It’s very confidential; that one is very confidential,” said Chheang Vannara, station manager for AirAsia in Cambodia, who declined to comment further.

Considering that 260 flights are scheduled to land in Siem Reap every week during the coming high tourist season between October and March, the potential boon from the $1,000-per-landing royalty fee is substantial.

But according to the International Air Transport Association (IATA), a Geneva-based trade group of nearly 250 airlines including Silk Air, imposing royalty fees actually violates international aviation code.

“Royalties also go against the Chicago Convention and International Civil Aviation Organization principles,” said Albert Tjoeng, assistant communication director of the Asia Pacific region at IATA, adding that IATA is not aware of the use of any similar charges at airports in the region.

“We do not support any form of tax or payment that increases the cost of traveling and dampens travel demand.”

Cambodia signed the Chicago Convention, also known as the International Convention on Civil Aviation, in 1956, according to the SSCA’s website. The Chicago convention is dedicated to coordinating and regulating international air travel.

Cambodia Airports, which owns and operates the Phnom Penh, Siem Reap and Sihanoukville airports, imposes standard landing fees based on the weight of aircraft that are identical for all three facilities, according to the Cambodia Airports website.

Cambodia Airports CEO Emmanuel Menanteau said he was unaware of the additional royalty charged in Siem Reap.

“We have no reason to be aware,” he said.

Several SSCA officials including Sok Suthoeun, chief of the aviation department, and Mok Samol, chief flight operation inspector, declined to comment when asked about the royalty.

Phay Siphan, spokesman for the Council of Ministers, which oversees the SSCA, said he knew nothing about the royalty. “I have no idea,” Mr. Siphan said.

Mey Vann, director of the ministry’s finance and industry department, also said he was unaware of the charge.

Still, not every airline appears to have to pay the royalty.

Pham The Hung, country manager for Vietnam Airlines, which owns 49 percent of Cambodia Angkor Air, which is now the national carrier, said his airline is exempt from paying the charge in Siem Reap.

“We know each other; they don’t [charge] us,” Mr. The Hung said, explaining that because Cambodia’s national carrier flies to Vietnam, a special arrangement has existed between the two governments since Vietnam Airlines began flying to Cambodia 25 years ago.

“If the authorities keep the high cost, they have their reasoning,” Mr. The Hung added.

For low cost airlines, however, the additional $1,000-per-landing charge could prove bad for business.

“Competitively priced input costs in markets encourage low-cost carrier growth. Where markets are protected this will deter growth if this cost cannot be passed onto customers,” said Baruthan Pasupathi, CEO of the Melbourne-based low-cost carrier Jetstar Airways.

Jetstar recently started flights to both Phnom Penh and Siem Reap. Mr. Pasupathi declined to comment specifically on the Siem Reap royalty.

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