End to Bangkok Air’s monopoly is welcome

via CAAI

Friday, 04 February 2011 15:00 Steve Finch

IT was the only airline to fly from Bangkok to Phnom Penh in the early nineties, the sole carrier to do so on the same route during the factional political infighting of July 1997, and briefly also had a monopoly between Phnom Penh and Siem Reap.

Now the last remaining Bangkok Airways monopoly in Cambodia on the lucrative Bangkok-Siem Reap route looks to be under threat.

Further confirmation this week that Cambodia Angkor Air is to join Bangkok Airways in flying between Southeast Asia’s main air hub – Bangkok – and one of the region’s premier tourist attractions – Siem Reap – represents good news for the industry.

But if the Kingdom is to maximise competitiveness among airlines and bring in more tourists it could open up the country’s airspace further.

Members of the domestic tourism industry have complained for years about the Bangkok Airways monopoly between Bangkok and Siem Reap, so addressing this problem by bringing in CAA this year should help alleviate concerns over high ticket prices and limited capacity, to an extent.

But previous government indications – dating back to Hun Sen in 1997 and subsequently expressed to members of the tourism industry since – that only Bangkok Airways and a Cambodian carrier would be allowed to operate on this popular route means the government is simply not doing enough to fly people to the country’s star attraction.

What is the reason behind this apparently arbitrary decision? Economically it makes little sense when the likes of Air Asia and Thai Airways would almost certainly be keen to schedule flights on this route.

The addition of CAA will further fuel concerns that the new national flag carrier is only interested in positioning itself on routes that do everything to boost its own standing but little to help Cambodia’s travel industry, which is surely the main aim of a national airline.

CAA has already monopolised the Kingdom’s only domestic air route between Siem Reap and Phnom Penh after Bangkok Airways’ licence was not extended in 2009, resulting in a decline in internal air traffic of around 10 percent from January to October 2010, compared to the same period of 2009.

In failing to establish flights to the newly renovated airport in Sihanoukville, CAA has again failed to serve the wider interests of the domestic travel industry. And while this latest move by the new national career to fly from Siem Reap to Bangkok is good news, it further reinforces suspicions that CAA is only interested in cherry picking the best routes and defending its position with arbitrarily designed market restrictions by the government, reportedly the airline’s joint-venture partner with Vietnam Airlines.

The end of Bangkok Airways’ last remaining monopoly in Cambodia is most certainly welcome, but only as long as the government isn’t simply replacing one monopoly with another.