China Aircraft Corporation requests majority stake in Lao Airlines as govt seeks partnership
VIENTIANE: The Lao government is considering a proposal made by Commercial Aircraft Corporation of China, Ltd. (COMAC) to purchase a majority stake in Lao Airlines, the national flag carrier.
It comes as the government is seeking to reform key state enterprises in a bid to improve their operation after years of sustained losses.
Prime Minister Sonexay Siphandone told the National Assembly (NA) on Monday (June 9) that Lao Airlines is one of four key state enterprises that are undergoing reform. The other three are Electricite Du Laos, the Lao State Fuel Company and the Nayobay bank.
The government is 'considering the proposal of COMAC on a comprehensive venture, particularly its proposal to hold at least a 51 per cent stake,' the PM told members of the NA's 9th legislature at its ongoing 9th Ordinary Session.
The Shanghai-headquartered aircraft manufacturer and Lao Airlines signed a Memorandum of Understanding on the joint venture in October 2024.
An independent auditing firm is currently carrying out an audit to determine the total value of Lao Airlines' assets.
As part of the partnership negotiation, COMAC asked to exclude Lao Airlines' existing debts from the venture deal.
NA member for Vientiane, Valy Vetsaphong, disagreed with the request to remove the airline's debt from the deal, saying that if it is cut out Laos would do better to employ more competent executives or a CEO to manage the operation of Lao Airlines instead of selling a majority stake in the company.
No party, she added, should be allowed to interfere with the airline's operation or ask it to subsidise in any form.
She also disagreed with the idea of allowing a foreign entity to hold a majority stake given that Lao Airlines is of strategic importance.
But another NA member supported the idea of selling off a larger stake within a certain timeframe to be specified in a joint venture agreement, after which Laos should be entitled to purchase sufficient shares to hold the majority stake. This process would also enable the transfer of know-how.
PM Sonexay said the Chinese company has also asked that Lao Airlines use COMAC-made planes for commercial flights, a move already undertaken by Lao Airlines with the addition of a COMAC C909 jet to its fleet in April this year.
Acquired through a lease agreement with COMAC, the aircraft, configured with 90 economy class seats, has been deployed on key domestic routes, including services between Vientiane and Pakxe, as well as between Vientiane and Savannakhet.
Plans are in place to expand operations to additional destinations, particularly in China, according to Lao Airlines.
The Chinese manufacturer is also providing comprehensive support services to ensure that operational standards meet stringent international safety regulations.
Lao Airlines' network of scheduled flights extends to at least ten international destinations and seven locations within Laos. This is complemented by charter flights to destinations in countries like China and South Korea.
Founded in 1976, the Lao national flag carrier also has interline and codeshare partnerships with over 30 airlines globally.
COMAC's requested partnership with Lao Airlines is part of its broader expanding presence in South-East Asia. - Vientiane Times/ANN
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