A Change of Guard

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Thursday 24 July 2014

Cambodian aviation's surge in airline start-ups as Chinese traffic drives rapid growth


Cambodia’s aviation market continued to grow rapidly in 1H2014 despite political instability in neighbouringThailand and weaker demand from its largest source market, Vietnam. But Cambodia has been able to take advantage of the turmoil in Thailand and the sudden unpopularity of Malaysia by successfully marketing itself as an alternative destination to Chinese tourists. With Cambodia's liberal airline policy, investors are using theopportunity to establish locally in order to serve the China market from the other end of the route.
Visitor numbers from China are up about 20% so far this year, making Cambodia an exception to the overall slowdown in China-Southeast Asia tourist traffic. The Cambodia-China market is expected to continuebooming in 2H2014 as more flights are launched, including new charter flights operated by at least two Cambodian start-ups backed by Chinese investors.
The total Cambodian aviation market grew by about 10% in 1H2014 with both of the country’s main airports, Phnom Penh and Siem Reap, recording similar growth. The growth rate represents a slowdown from 2012 and 2013 but is impressive given other Southeast Asian markets have seen bigger slowdowns so far this year, and in some cases contractions.

Cambodia aviation market has seen steady rapid growth since 2010

Cambodia has been one of the world’s fastest growing aviation markets since 2010. As CAPA previously analysed, Cambodia’s three commercial airports handled 5.1 million passengers in 2013, representing 18% growth compared to 2012. Cambodia Airports also recorded growth of 18% in 2012, 13% in 2011 and 14% in 2010.
See related reports:
Siem Reap has been one of Asia’s fastest growing airports over recent years...
Popular tourist town and UNESCO heritage site Siem Reap has seen the most rapid growth and overtook the capital Phnom Penh as Cambodia’s largest airport in 2012. Siem Reap has been one of Asia’s fastest growing airports over recent years, recording 20% growth in 2013 and 22% growth in 2012, while Phnom Penh also recorded impressive growth of 13% and 15% respectively.
In 1H2014 both airports grew at about a 10% clip, with Siem Reap’s throughput reaching 1.5 million and Phnom Penh reaching 1.3 million. Cambodia’s third commercial airport, the costal town of Sihanoukville, is much smaller and only handled 18,000 passengers in 1H2014.

Monthly traffic figures at Siem Reap were in the double digits year-over-year for three of the first six months in 2014 – February, April and May. Traffic was up by 7% in the most recent month, Jun-2014. Siem Reap relies almost entirely on the leisure sector and is a highly seasonal market, with traffic figures during the peak months of December, January and February roughly double the figures from the weakest months of May, June and September.
Siem Reap monthly passenger traffic: Jan-2010 to Jun-2014
At Phnom Penh there also has been double digit growth for three of the six months so far this year – January, February and April. In Jun-2014 Phnom Penh recorded growth of 7%, equalling Siem Reap.
Phnom Penh has a large inbound leisure market but unlike Siem Reap also has significant business and outbound leisure traffic.
Phnom Penh monthly passenger traffic: Jan-2010 to Jun-2014

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