Growth itinerary of Cambodia Airports-

Cambodia Airports, formerly Societe Concessionnaires Des Aeroports (SCA) (until 2011), is a joint venture (JV) company that holds the concession for the development and management of the three international airports in Cambodia – the Phnom Penh International Airport in Phnom Penh; the Siem Reap International Airport in Siem Reap; and the Sihanoukville International Airport in Sihanoukville. Cambodia Airports’ other subsidiary, Cambodia Management Services (CAMS), has the operating contracts for the three airports.

The France-based Vinci Group possesses a majority stake (70 per cent) in Cambodia Airports, under its subsidiary Vinci Airports, while the remaining 30 per cent is held by Cambodia-based Muhibbah Masteron. Muhibbah Masteron is a JV established by Malaysia-based Muhibbah Engineering Berhad (70 per cent) and two Cambodian businessmen – Kong Triv and Hann Khieng (30 per cent). The concession for operating the country’s airports was awarded to SCA in 1995; it will be valid till 2040.

Since its first forays into airport concessions through the airports in Cambodia, the Vinci Group has extended its activity to 23 airports, including 10 each in France and Portugal.

Rising passenger traffic at CAMS’ airports

Although Cambodia has around 17 airports, the only three that handle scheduled commercial airlines at the international level are operated by Vinci through CAMS. The airports connect Cambodia to around 30 international destinations through 23 airlines and handle more than 500 aircraft movements per week.

Despite the global financial crisis, CAMS has been able to stick to its expansion plans, thanks to the country’s booming tourism industry. Traffic has increased by a factor of 6 over the past 11 years from 605,000 in 2001 to 3.7 million in 2012. In 2012, the combined recorded traffic of the three airports was 4.3 million passengers, constituting an increase of 17.6 per cent over 2011.

In 2012, the Phnom Penh and Siem Reap airports witnessed traffic growth of 13 per cent and 22 per cent, respectively, and with it, both airports exceeded the milestone of 2 million passengers per year. Between January and March 2013, Phnom Penh airport recorded a passenger traffic figure of 616,070, while Siem Reap recorded 922,194.

Initially, Vinci Airports was responsible for only the Phnom Penh and Siem Reap airports; however, Sihanoukville airport was included in the contract in December 2011. Sihanoukville airport was recommissioned in 2007, following a major overhaul that included the doubling of the terminal capacity (to accommodate 700,000 passengers per annum) and the extension of the runway to 2,500 metres from 1,400 metres. The airport has been fully operational ever since it obtained its international status in 2010.

Solid revenue flow

Since 1995, Vinci Airports has invested $220 million in the three airports. It earns its revenues through airport tariffs that it levies in accordance with the International Civil Aviation Organization’s recommendations. The tariffs are based on each aircraft’s “Maximum Take Off Weight” for parking and landing. In addition, aircraft landings between 6 p.m. and 6 a.m. are subject to an additional charge of 10 per cent of the landing fees. CAMS also levies a service charge of $25 for every passenger that passes through the airport.

The company is also involved in ancillary activities that yield non-aeronautical revenues including cargo-related businesses, storage facilities, and leasing floor space. It also has exclusive rights to ground handling services at the Phnom Penh, Siem Reap, and Sihanoukville international airports, subject to a separate agreement.

The revenues of the company increased by 237.7 per cent between 2010 and 2012 to reach Euro 180 million in 2012. During the first quarter of 2013 (January–March), Vinci Airports’ revenue grew by 12.4 per cent to Euro 55 million, primarily due to increased passenger traffic at the Cambodian airports.

Vinci Airports is also supporting an extensive programme of archaeological digs at Siem Reap airport, near the temples of Angkor, under a five-year agreement that was renewed in 2011. Led by the French National Institute for Research in Preventive Archaeology (Inrap), the Authority for the Protection and Management of Angkor, and the Region of Siem Reap (Apasara), the project has a two-pronged aim:

  • To promote the transfer of French archaeological expertise to their Cambodian counterparts by providing training in preventive archaeology for archaeology students at the University of Phnom Penh; and
  • To shed new light on Cambodian history, and thus attract more tourist traffic, which would be profitable for CAMS.

Surging footfalls drive expansion plans

In order to keep up with Cambodia’s growing traffic, Vinci Airports will be funding CAMS’ $400 million investment plans over the next eight years. The plans include the extension of the international terminal at Phnom Penh airport, the upgrading of Siem Reap airport, and improvements to Sihanoukville airport. Within the planned bugdet, $80 million will be used to expand the international terminal at the Phnom Penh International Airport, while $100 million will be allocated for the upgrading of the Siem Reap International Airport. Furthermore, $200 million will be utilised for the construction of a new runway at Sihanoukville airport, along with a new terminal and boarding area, which are due to be completed by 2025. According to

N. Khek, Director, Communications and Public Relations, Phnom Penh International Airport, “The first phase of the works will be launched by early 2013 for the Phnom Penh and Siem Reap airports. When the upgrades are complete, the terminals at both airports will double their capacity to 5 million passengers per year each.”

Reaching for the skies

Cambodia Airports’ plan to expand the airport capacities is a well-timed move, as air traffic in Cambodia is booming. According to the Center for Aviation, the provider of independent aviation market intelligence, the Cambodian aviation market grew by 18 per cent in 2012. Moreover, it is poised for more rapid growth in 2013, thus making it one of the fastest growing markets in Southeast Asia.

The country’s flag carrier, Angkor Air, which uses both Phnom Penh and Siem Reap airports as hubs, is pursuing significant expansion, albeit from a very small base. It plans to more than double its fleet by the end of 2015 and establish connections to several new markets including mainland China, Hong Kong, India, and South Korea. Meanwhile, international carriers are also continuing to add services to the market.

The financing of the expansion also would not pose much of a hurdle for Cambodia Airports, thanks to the deep pockets of its mother company, the Vinci Group. In general, it looks as though the journey ahead for Cambodia Airports should be smooth, as demand is expected to be robust and revenue flow steady. Coupled with the ASEAN Single Aviation Market policy that is expected to be rolled out by 2015, the sky is really the limit for the company.