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New Cambodian airline suspends operations in face of rising costs

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24-Aug-2005
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PHNOM PENH : Cambodia's newest carrier First Cambodia Airlines, partly-owned by the prime minister's daughter, has suspended operations due to spiralling fuel prices and other high costs.

The carrier, a joint venture between Premier Hun Sen's daughter Hun Mana and a Hong Kong firm, launched in February with flights to the southern Chinese city of Guangzhou, Singapore and Kuala Lumpur.

"We have suspended our flights... Yes, of course, we have lost money, but I don't know how much because the company didn't make any income from the beginning," operations manager Uk Thach told AFP on Tuesday.

He said record fuel prices, high airport fees and expensive running costs have forced the company to return its single leased 161-seat Airbus 320-200, but they plan to replace it with a smaller plane of an unspecified model.

"We are negotiating and expect to reach an agreement on leasing a new plane soon," he said, declining to say with whom the company was talking.

The carrier was set up with capital of 2.5 million dollars and employs around 50 people.

Meanwhile Prince Norodom Chakarapong, owner of Royal Phnom Penh Airways, told Radio Free Asia late Monday that his carrier resumed its domestic flights Monday after a four-month suspension due to high costs.

The carrier, which flew to four local destinations, has cut its staff by around half and will now make weekly rather than daily flights, he said.

Cambodia's small airline industry, which includes two other local carriers, has had a tumultuous history since nearly three decades of conflict ended here in 1998.

Aviation officials said last week the kingdom will launch a new national carrier, three years after the demise of its predecessor.

- AFP

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