AirAsia is banking on the growth of tourism within Southeast Asia with the launch of its newest airline, AirAsia Cambodia, which will launch its first flight on Thursday.
Tony Fernandes, CEO of AirAsia’s parent company Capital A, said the airline industry in Southeast Asia remains promising in the second half of this year due to the increasing number of Chinese tourists visiting Japan across the region, particularly in Thailand. He said that. Southeast Asia’s largest low-cost airline.
He said airlines continue to face headwinds from high fuel prices due to geopolitical conflicts and a strong US dollar against local currencies, adding to the strain on airlines as their expenses are paid in dollars. .
“However, we are not worried about an economic downturn as demand for air travel in Southeast Asia remains very strong.”
Fernandes said average airfares are up 25% compared to before the pandemic.
He believes no airlines will start competing on price in the short term because everyone has learned the bitter lessons from the pandemic.
“If the regional central bank lowers interest rates, airfares may come down. That could happen in 2025,” Fernandes said.
Meanwhile, AirAsia Aviation Group, the aviation arm of Capital A, has signed a joint venture agreement with Civilai Asia to establish a new low-cost airline in Cambodia, AirAsia Cambodia.
AirAsia Cambodia CEO Visos Nam said during the launch of the first domestic flight on Thursday that this marks a new chapter for Cambodia’s tourism industry.
He said AirAsia’s network will help boost economic activity through stronger tourism and business opportunities.
“The launch of domestic flights coincides with the Cambodian government’s efforts to attract more tourists to Siem Reap through the promotion of the Visit Siem Reap 2024 campaign,” he said.
According to the Cambodian Ministry of Tourism, Cambodia attracted 5.43 million international tourists in 2023, up from 2.27 million in 2022.
The airline operates two aircraft from its hub at Phnom Penh International Airport, with domestic flights to Siem Reap and Sihanoukville, and plans to increase its fleet to five by the end of this year.
AirAsia Cambodia plans to announce new international routes within the next quarter, which could include direct flights to Kuala Lumpur, Bangkok and cities in China.
As for long-term plans, the company aims to have a fleet of 25 aircraft within five years, but will carefully assess travel demand before expanding.
“The current problem is a shortage of aircraft. We need to negotiate with Airbus regarding deliveries,” Fernandes said.
AirAsia Cambodia aims to carry 1.8 million passengers this year, the majority of whom will initially be domestic travelers.