Indonesia's Rajawali Group, Cambodia agree to set up airline

Jakarta/Phnom Penh - Indonesia's Rajawali Group has signed off with the Cambodian government to develop a new Cambodian national airline, but details were still being worked out, a Cambodian aviation official said Friday.

The secretary-general of Cambodia's Secretariat of Civil Aviation, Chea Oun, said the announcement was only a first step and many more details needed to be worked out, including the new airline's name.

"The real work is only just beginning. We need to work closely with our new partner now to work out all the details," Oun said by telephone. "A lot of things are still undecided."

What is certain is that the new airline will have around 50 million dollars in startup capital and the Cambodian government will hold a 51-percent stake.

Cambodia's notoriously unreliable and financially plagued national carrier Royal Air Cambodge went bankrupt in 2000 and was liquidated in 2001.

In November, Cambodian Prime Minister Hun Sen publicly berated his deputy, Sok An, for taking too long to secure a deal on new national carrier as tourism grew by 20 per cent, threatening to do the deal himself.

Since then, negotiations have sped forward, with Sok An co-signing the agreement Thursday.

Under the agreement, Rajawali will build the facilities needed to develop the airline, Indonesian state news agency Antara quoted Rajawali Group spokesman Christiantoko as saying Friday.

"Its paid-up capital will be around 50 million dollars," he was quoted as saying, adding that both sides were committed to developing the Cambodian airline into a world-class operation.

Rajawali has wide-ranging business interests in telecommunications, media, hotels, and cigarette and cement manufacturing.

Rajawali CEO Peter Sondahk is ranked as one of Indonesia's wealthiest men. (dpa)