Phnom Penh’s new airport – will it be ready in 2023…or 2024…or 2025?

Cambodia has been highlighted as one of the key emerging Southeast Asian markets for the future. Located in the southern portion of the Indochina, it is sandwiched between Thailand to the northwest, Laos to the northeast, Vietnam to the east and the Gulf of Thailand to the southwest.

Official arrivals data from the Ministry of Tourism highlights its recent rise with annual entries increasing from just 2.5 million in 2010 to over 6.2 million last year. There has been year-on-year growth throughout the decade, and despite a slowing between 2014 and 2016 (down to +5.0%), growth has subsequently returned to double-digits: +11.8% in 2017 and +10.7% in 2018. For the first nine months of 2019 the double-digit growth continues with arrivals up +10.0% year-on-year.

To support the potential, an investment has been required in infrastructure, but there seems some uncertainty how quickly new capacity will arrive. This is particularly the case in the capital Phnom Penh, where a new airport is under construction to support the visitor growth. Whether this will come online in 2023, 2024 or 2025 is not known. What is sure is that when it does, it will bring much-needed spare capacity and support Cambodia’s rise.

Overseas Cambodia Investment Corporation (OCIC) said recently that construction of the New Phnom Penh airport is on schedule and that, if there are no issues with the land, the airport will be ready by 2023. However, Cambodia’s State Secretariat of Civil Aviation has contradicted this, saying: “We need time to clear the land and lay the foundations and solve any land dispute. As per our schedule, the new airport will be ready by 2024, but it may be delayed until 2025”.

OCIC has a vested interest in the airport hitting targets as it is the principal investor, as The Blue Swan Daily highlighted earlier this year.

The existing Phnom Penh International airport, along with those at Sihanoukville, and Siem Reap, are managed by VINCI Airports through a part-owned subsidiary, Cambodia Airports, but the government opted for a state solution for the new capital city airport. As such, VINCI was not invited to participate in the bidding procedures.

The article pointed out that Cambodia’s airports witnessed a dramatic increase in air passenger traffic in the summer of 2019. More than half of the Kingdom’s passengers travelled through the capital, Phnom Penh, which saw a boost of +10% in domestic and 21% in international travellers in July alone.

Passenger traffic growth has continued at Phnom Penh, based on data to the end of the third quarter. But this is not at the levels (25% or more) witnessed in the last two years.

CHART – Passenger traffic levels at Phnom Penh International airport continue to rise in 2019, but at a levels notably down on the past two yearsSource: CAPA – Centre for Aviation and Cambodia Airports and VINCI Airports

A negative reaction to its dramatic growth is that despite several extensions that increased design capacity to five million ppa, the single-runway airport will see that capacity exceeded this year. The importance of the (incoming, tourist) Chinese market continues to grow. Current schedules for the week commencing 09-Dec-2019 show the two leading airlines are Chinese LCC Spring Airlines and Lanmei Airlines, a recent (2017) Cambodian start-up LCC which operates into China (and even more so from the vacation resort of Sihanoukville).

The Cambodian government approved the proposal to build the new airport to serve Phnom Penh at an estimated cost of USD1.5 billion in Jan-2018, with the goal that it would be operational by 2025. That date was brought forward to 2023, but could ultimately revert back to the original timetable.

The new airport is being constructed on partially reclaimed land adjacent to Boueng Cheung Loung, a lake about 30 kilometres south of Phnom Penh. Land clearance began in Dec-2018 and in Feb-2019 the Government established a special commission to supervise the development of the airport.

The 4F class airport will be capable of handling large long-haul aircraft and will reportedly cover an area of around 2,600 hectares, which would make it one of the largest airports in the world by area upon completion, whether that is 2023…2024… or 2025!