Royal Group Denies Plans to Abandon New Airline Venture

The Royal Group on Sunday denied a fresh report that its planned venture with Philippine Airlines to start up what would be Cambodia’s second national carrier was soon to be abandoned.

The pending arrival of Cambodia Airlines has suffered delays and been surrounded by reports of shelved investment since business tycoon Kith Meng’s Royal Group signed a deal with the San Miguel Corporation—the majority shareholder of Philippine Airlines—in April 2013.

On Thursday, the Australia-based Center for Asia-Pacific Aviation released a report on the state of Cambodia’s airline industry claiming that the venture would likely be abandoned.

“The joint venture, which envisioned domestic operations with Bombardier Dash 8 turboprops and international flights with A320 family aircraft, is reportedly likely to be abandoned entirely,” it said.

On Sunday, Royal Group’s chief financial officer, Mark Hanna, said he had not seen the report but denied that the venture was in any doubt.

“It’s definitely not abandoned,” he said. “We’re going through the process of getting AOC [air operator’s certificate] approval.”

Mr. Hanna said he did not know how long it might take for approval from the Secretariat of Civil Aviation to arrive. He said Royal Group’s project director for the venture had recently left the position and that he would be taking on the role in a matter of weeks.

Philippine Airlines did not reply to a request for comment.

At the signing of the deal in April of last year, Mr. Hanna said domestic flights could start as soon as June 2013 with international flights to follow in October.

In January, however, Philippine Airlines chief operating officer Ramon Ang was quoted by Philippine media saying that his firm was delaying its investment in the venture because of the “situation” in Cambodia—an apparent reference to political and labor unrest that peaked in late December.

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