Direct Flights to Japan Spur Bilateral Trade, Tourism

KHMER TIMES
MAY KUNMAKARA

Shinya Katanozaka, president and CEO of ANA Holdings. KT/Mai Vireak

Japanese tourist arrivals to Cambodia stand seventh out of all tourist arrivals to the Kingdom. The number of Japanese arrivals rose 0.3 percent to 90,877 in the first half of 2016 compared to the same period last year. In 2015, arrivals fell 10.4 percent to 193,330 from 215,788 a year earlier, according to data from the Ministry of Tourism.

According to data from the Council for Development of Cambodia, cumulative investment since 1994 from Japan reached more than $400 million as of June last year. Cambodia’s exports to Japan rose 32.7 percent to $565 million in this first half of this year, from $425 million over the same period last year while Cambodia’s imports from Japan rose only marginally by 0.9 percent to $134 million in the first half of the year.

In the culmination of the diplomatic and economic relationship between Japan and Cambodia over the past 60 years, All Nippon Airways (ANA) started its direct flight service from Tokyo’s Narita Airport to Phnom Penh International Airport on September 1.

Shinya Katanozaka, president and CEO of ANA Holdings Inc. sat down with Khmer Times’ May Kunmakara to talk about his decision about the direct flights and his optimism about the relationship between the two countries.

KT: Cambodia used to have direct flights from Japan before the global financial crisis. In May 2014, Thailand’s Asia Atlantic Airlines commenced flights between Japan and Cambodia, but stopped the service after the first flight due to low demand. So, why did ANA decide to begin flying this route?

Mr. Katanozaka: My airline operates in 19 countries all over the world in 41 cities with 61 routes and wants to increase the number of routes as well as to allow its sales revenue to grow. In 2020, Japan will host the Olympics in Tokyo pushing us to expand our business network to welcome all foreign tourists. An increasing number of visitors is coming to Japan now. Networks with other countries is our main strategy.

We have observed that the aviation industry is growing strongly in Asean, especially in Cambodia, and we didn’t have direct flights so we decided to start our direct flight service to Cambodia.

KT: If I am not wrong, both of our prime ministers pushed for direct flights between our countries. Did you receive any directives or guidelines from your government for starting flights here?

Mr. Katanozaka: Of course. Last year, there was a Japan-Mekong Summit in Japan that Prime Minister Hun Sen attended and I had the honor of meeting Prime Minister Hun Sen. At the time, he recommended and pushed us to consider a direct flight to Cambodia. And I promised him we would start our operation as soon as possible and now it has happened. I am so happy to have received commitment and encouragement from Prime Minister Hun Sen.

KT: Presently, more than 20 airlines are operating in Cambodia and serve many destinations around the world with a few already operating transit flights to Japan. As a newcomer to Cambodia, how do you feel about the competition?

Mr. Katanozaka: Well, as you may be aware, when we didn’t have direct flights, you needed to transit in South Korea, Thailand or Singapore and now this is the first direct flight to Cambodia and I hope it will make passengers happy. I think it is also our main strategy to be competitive with the other players in the market.

KT: In mid-January, ANA signed a memorandum of understanding (MoU) with Vietnam Airlines to buy some stake there. How will the MoU help your business in Cambodia?

Mr. Katanozoka: We are concentrating on the Indochina market which is not just Cambodia as we have already started direct flights to Vietnam and Myanmar. Cambodia is the third Mekong country and that’s why we decided to invest in Vietnam Airlines by code-sharing, etc. because we want to be more competitive in the region. In addition, Vietnam Airlines also operates Cambodia Angkor Air’s flight from Phnom Penh to Siem Reap so we will make the route even stronger.

KT: How do you plan to get Cambodian people to visit Japan as their disposable income is still low?

Mr. Katanozaka: I met with the minister of tourism and civil aviation officials who said that Cambodia’s economic growth continues to grow, meaning people’s income will also increase day by day. I think people are also thinking about paying a visit to Japan. Moreover, country to country, we are in talks about making the visa application to Japan much easier. So, if we look at three points – economic growth, good diplomatic relations and political stability, there are good reasons for Cambodian people to visit Japan. We are also trying to promote Japan, tourist sights and the food to local people here.

KT: Right now, the US dollar is appreciating strongly against other currencies in the region. Will this affect the number of passengers flying here?

Mr. Katanozaka: If you look at the yen against the US dollar now, the yen is getting very strong making us worry a bit that foreign tourists earning US dollars might not be able to visit Japan. However, I think foreign tourists have never thought like that because they just want to see the sights, learn about history and appreciate Japanese culture. They rarely think about fluctuations in currency. If they think they want to visit us, they will come. In contrast, I have seen that the number of foreign tourists is increasing so I’m not too worried.

KT: Do you think the direct flight will help spur more investment flow from Japan to Cambodia and more bilateral trade between the countries?

Mr. Katanozaka: Well presently, many big Japanese companies have come to Cambodia such as Aeon Mall, Denso, and Minibea and they really wanted to have a direct flight between Japan and Cambodia. Now, once we have it, trade relations between the two countries will be even larger and more investment will flow from Japan. Now, we have decided to fly directly to Phnom Penh and in the future, we will connect to Siem Reap and other Cambodian cities.