Laos seeks to sell minority stake in national carrier Lao Airlines

The Lao government has plans to reduce its ownership in national carrier Lao Airlines to 51 per cent in an attempt to get mounting losses under control.

According to a report by Smart Aviation Asia Pacific, Laos’ ministry of public works and transport as the full owner of the airline seeks to offload 49 per cent of its shares to private investors.

The country’s prime minister Phankham Viphavanh told the National Assembly that nearly all “state-owned enterprises are losing money and, rather than helping to drive the economy, they are proving to be a heavy burden on the government which has to subsidise these businesses.”

“Poor management”

Viphavanh added that the administration of these enterprises are typically “poorly managed” as they “do not follow a sound business plan” and blamed their management failures on recruitment policies that were largely based on nepotism. Embezzlement and corruption are adding to the problems, he said.

The government plans to retain at least a 51 per cent stake in Lao Airlines, but the immediate challenge is to find private investors willing to buy the remaining stake in the loss-ridden airline. Observers say that it is doubtful that private investors would take a minority stake in the airline without having complete control over the management and financial policy.

For this reason, there have been rumours that Laos could possibly privatise the airline, but no statements have been made in this regard.

Resuming international services

In June, the airline resumed international services, with the Luang Prabang-Bangkok route one of the first to be reactivated on 17 June. Other international destinations include Cambodia, Vietnam, China, Japan, South Korea and Singapore.

Lao Airlines currently has a fleet of 11 aircraft, four Airbus A320-200 and seven ATR turboprops.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

 

 

The Lao government has plans to reduce its ownership in national carrier Lao Airlines to 51 per cent in an attempt to get mounting losses under control. According to a report by Smart Aviation Asia Pacific, Laos’ ministry of public works and transport as the full owner of the airline seeks to offload 49 per cent of its shares to private investors. The country’s prime minister Phankham Viphavanh told the National Assembly that nearly all “state-owned enterprises are losing money and, rather than helping to drive the economy, they are proving to be a heavy burden on the government which...

The Lao government has plans to reduce its ownership in national carrier Lao Airlines to 51 per cent in an attempt to get mounting losses under control.

According to a report by Smart Aviation Asia Pacific, Laos’ ministry of public works and transport as the full owner of the airline seeks to offload 49 per cent of its shares to private investors.

The country’s prime minister Phankham Viphavanh told the National Assembly that nearly all “state-owned enterprises are losing money and, rather than helping to drive the economy, they are proving to be a heavy burden on the government which has to subsidise these businesses.”

“Poor management”

Viphavanh added that the administration of these enterprises are typically “poorly managed” as they “do not follow a sound business plan” and blamed their management failures on recruitment policies that were largely based on nepotism. Embezzlement and corruption are adding to the problems, he said.

The government plans to retain at least a 51 per cent stake in Lao Airlines, but the immediate challenge is to find private investors willing to buy the remaining stake in the loss-ridden airline. Observers say that it is doubtful that private investors would take a minority stake in the airline without having complete control over the management and financial policy.

For this reason, there have been rumours that Laos could possibly privatise the airline, but no statements have been made in this regard.

Resuming international services

In June, the airline resumed international services, with the Luang Prabang-Bangkok route one of the first to be reactivated on 17 June. Other international destinations include Cambodia, Vietnam, China, Japan, South Korea and Singapore.

Lao Airlines currently has a fleet of 11 aircraft, four Airbus A320-200 and seven ATR turboprops.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

 

 

NO COMMENTS

Leave a Reply