Cambodia is moving toward strengthening its legal system and regulatory regime to protect the lease and sale of aircraft as a new wave of startups look to enter the hotly contested airline business. On February 22, the State Secretariat of Civil Aviation (SSCA) in cooperation with delegates from the U.S. Federal Aviation Administration and Boeing, held a seminar in Phnom Penh to discuss the economic benefits of the Cape Town Convention in an effort to strengthen the country’s business environment.

Speaking with AIN on the sidelines of the conference, Jeffrey Klang, the FAA’s assistant chief counsel of international affairs and legal policy, stressed that the registry established under the treaty reduces financial risks of lending for aircraft financiers by clarifying ownership while providing standard remedies in the event of default by a debtor. That, as a result, reduces the cost of raising financing for aircraft.

“The Convention could not only support airlines obtain financing at a cheaper rate but also improve safety standards within the country,” he said.

Boeing vice president of strategic regulatory policy Daniel Da Silva expressed optimism that Cambodia would become a signatory in the near future. “The attendance of representatives from the Cambodian government indicates a very high level of interest in pursuing ratification and that is very encouraging as it shows the economic value of the Cape Town Convention,” he told AIN.

As of February, 75 countries have acceded to the treaty including five Southeast Asian nations—Singapore, Malaysia, Vietnam, Myanmar, and Indonesia. Last Wednesday, the American contingent held a similar seminar in Laos. According to Klang, the process toward ratification for all participating countries could take two years or more.

SSCA senior deputy director Sinn Chanserey Vutha confirmed that the Cambodian government plans to become a signatory and continues to study the convention’s requirements.

“The Cape Town Convention is very important for Asean member countries, especially for Cambodia, where we have witnessed a boom in air travel,” he told AIN. “As new companies enter the market, we want to ensure that we have the right protection measures in place.”

While Cambodia has enjoyed a surge of startup activity in recent years, a number of airlines have struggled for viability in an increasingly competitive market. Three airlines—Small Planets Cambodia, Bayon Air, and KC Airlines—ceased operations in recent months, and a fourth, Bassaka Air, ended scheduled flights and now operates only charters. Nevertheless, five new airlines—Cambodia MJ Airlines, Domrey International Airlines, Fly Galaxy, Southeast Asia Airlines, and Maritime Airlines—have expressed interest in launching operations in the country.