Cambodia, Indonesia's Rajawali to set up airline

JAKARTA, April 10 (Reuters) - The Cambodian government and Indonesia's Rajawali Corporation agreed on Thursday to set up a new national flag airline to serve Cambodia's growing tourism industry, the company said in a statement.

The joint-venture company's capital is estimated to reach $50 million and the Cambodian government will own 51 percent while Rajawali Group will own the rest.

"With a national flag carrier, we envisage our economy and tourism industry will grow rapidly," Cambodia's Deputy Prime Minister, Sok An, said in the statement released by Rajawali.

Cambodia launched its own national flag carrier, Royal Air Cambodge (RAC), in the mid-1990s but it went bankrupt, resulting in heavy losses for the government.

The new carrier, however, might have a better chance due to the rising number of tourists to Cambodia. In 2007, the country attracted more than 2 million tourists and more than 60 percent of them used air travel.

The number of tourist arrivals in 2007 rose almost 19 percent from the previous year and air travel increased more than 25 percent, according to the tourism minister on the official Web site www.mot.gov.kh.

Rajawali was founded by Indonesian entrepreneur Peter Sondakh, ranked by Globe Asia magazine as 19th wealthiest Indonesian with a net worth of $510 million. The group controls diversified businesses from a cement firm to department stores and a taxi company.

It holds an around 25 percent stake in Semen Gresik SMGR.JK, Indonesia's largest cement maker. Rajawali also founded the country's third-largest mobile phone firm before selling its stake to Telekom Malaysia (TLMM.KL: Quote, Profile, Research) and Emirates Telecommunications ETEL.AD.

(Additional reporting by Tyagita Silka) (Reporting by Nury Sybli, writing by Tyagita Silka, editing by Sugita Katyal)