Skift Travel News Blog

AirAsia Aviation Group on Friday announced a joint venture with Cambodia-based Sivilai Asia to launch a new low-cost carrier — AirAsia Cambodia.

The airline, in which AirAsia will be the majority partner, expects to commence operations in late 2023.

Cambodia is the fifth Southeast Asian destination that AirAsia will be foraying into after Malaysia, Indonesia, Thailand and the Philippines.

Speaking to the media, Tony Fernandes, CEO of Capital A, AirAsia’s parent company, said all of the group’s future airlines would be based in the region as this is an area they know best and have a strong brand presence.

In 2020, the aviation group shut down operations of AirAsia Japan and last month the company announced that it has sold off its remaining 16.67 percent stake in AirAsia India to Tatas-owned Air India.

AirAsia plans to touch pre-Covid levels by the second quarter of 2023 and in true Tony Fernandes style the Capital A CEO said he’s confident AirAsia Cambodia would be profitable “from the get go.”

“Cambodia is a market that is familiar to us and where we have deep infrastructure in place,” Fernandes said.

AirAsia Aviation Group is the largest foreign airline and the second largest airline group overall operating into Cambodia in terms of capacity, according to group CEO Bo Lingam.

Pre-pandemic, AirAsia operated 90 weekly flights from Malaysia and Thailand to Cambodia and is currently flying about 49 weekly flights.

“The value of AirAsia’s network is an insurmountable asset; it will be another flag of extensive connectivity in Cambodia and into the region, namely China, India and North Asia,” Fernandes said.

Currently, there are no direct flights between India and Cambodia.

Reacting to earlier reports of a proposed merger of AirAsia and AirAsia X, Fernandes had clarified on Monday that the group proposed to form a separate aviation group comprising all its airlines.

Air India, the erstwhile Indian state carrier which had been bought by the Tata Group in a $2.4 billion deal earlier this year, announced on Monday that it would look to progressively induct 30 new aircraft from December onwards, over the next 15 months.

With the succesful induction of the 25 narrow-body and five wide-body aircraft, the airline plans to increase its fleet size to 143 by the end of 2023. The airline currently has 70 narrow-body aircraft and 43 wide-bodied planes.

The airline will be leasing 21 Airbus A320neos, four A321neos and five Boeing 777-200LRs, in a bid to expand its fleet and global footprint.

Moving away from its earlier business model, Air India also plans to introduce premium economy seats in the 777-200LRs, similar to its sister airline Vistara, which is a joint venture of Tatas and Singapore Airlines, wherein Tata Sons holds a 51 percent stake.

The Boeing aircraft will join the fleet between December 2022 and March 2023, and would be deployed on routes connecting Indian metropolitan cities to the U.S., the airline said in a press statement.

The airline will be launching a direct flight connecting Mumbai to San Francisco and will also connect Mumbai to JFK and Newark, while Bengluru would receive a three times weekly service to San Francisco. 

The four A321neo aircraft are expected to join the Air India fleet in the first quarter of 2023, while the 21 A320neo planes will be inducted in the second half of 2023.

These new aircraft, together with existing aircraft being returned to service, address an immediate need for more capacity and connectivity, and mark a strong step forward, Campbell Wilson, CEO and managing director of the airline said, adding, “Air India has exciting expansion and renewal plans, of which these new aircraft are just the beginning.”

As part of its plan to expand its fleet, the airline in July announced its decision to allow its pilots fly till the age of 65, while the earlier retirement age for pilots was fixed at 58.