New carrier's KL flight a sign of strong ties

New carrier's KL flight a sign of strong ties

PHNOM PENH (AFP): The inaugural flight of Cambodia's national carrier, Royal Air Cambodge (RAC), left yesterday for Kuala Lumpur, a sign of the country's strong ties with Malaysia, said Cambodian co-premier Prince Norodom Ranariddh.

"This inaugural flight symbolizes the business partnership between Royal Air Cambodge and Malaysia Helicopter Services (MHS) and also the strong bilateral friendship between Cambodia and Malaysia," Prince Ranariddh said.

"Today you are witnessing the rebirth of the world's newest international airline," he told dignitaries before boarding the flight with second Prime Minister Hun Sen and other officials for a one-day visit to Kuala Lumpur.

RAC is a joint venture between the government and MHS, the major shareholder of Malaysian Airways. MHS will hold 40 percent of venture.

Officials put the cost of setting up Cambodia's sole national carrier at US$10 million.

It will initially fly to Kuala Lumpur and Singapore before expanding operations to other destinations, officials said.

RAC was the national carrier until 1970 when former ruler, then prince but now king Norodom Sihanouk was overthrown in a coup d'etat, after which it became Cambodia Airlines until 1975 when the isolationist Khmer Rouge did away with the country's airline business.

The agreement to set up RAC was signed last Wednesday amid official optimism the new carrier would help bring tourism and business to Cambodia but controversy still surrounds the closure of two Thai-owned airlines to make way for RAC.

Cambodia International Airlines (CIA) staff and officials complain they were only given two days notice to close on Dec. 24. Government officials vigorously deny the charge.

Another Thai-owned airline, Siam Kampuchea (SK Air), was ordered to close at the same time but the government recently said it could continue to Jan. 31.

Many passengers bought tickets on both airlines and neither the government nor the airline companies are willing to accept any liability for loss.

But while these two Thai-owned businesses in Cambodia have lost out, officials say Malaysia is the biggest investor in the country.

Some $180 million worth of projects are already operating in Cambodia and between $350 million to $380 million worth of investment has been approved, officials said.