The Lao government plans to reduce its ownership in national carrier Lao Airlines to 51% in an attempt to contain mounting losses. According to a report by Smart Aviation Asia Pacific, the Lao Ministry of Public Works and Transport, the airline’s full owner, is seeking to sell its 49% stake to private investors. The country’s prime minister, Pangan Vipawan, told the National Assembly that almost all “state-owned enterprises are losing money, and instead of helping to boost the economy, they are a heavy burden on the government…”
The Lao government plans to reduce its ownership in national carrier Lao Airlines to 51% in an attempt to contain mounting losses.
According to a report Smart Aviation Asia PacificThe Lao Ministry of Public Works and Transport, the airline’s wholly-owned owner, is seeking to sell its 49 percent stake to private investors.
The country’s prime minister, Pangan Vipawan, told the National Assembly that almost all “state-owned enterprises are losing money, and instead of helping to boost the economy, they become a heavy burden for the government to have to subsidize these enterprises.”
“Poor management”
Viphavanh added that the management of these businesses was often “mismanaged” as they “did not follow a sound business plan” and blamed their management failures on recruitment policies based largely on nepotism. Corruption and corruption are exacerbating the problem, he said.
The government plans to retain at least 51 percent of Lao Airlines, but the challenge now is to find private investors willing to buy the remaining stake in the loss-making airline. Observers say it is questionable for private investors to take a minority stake in the airline without full control over management and financial policies.
As a result, there are rumors that Laos may privatize the airline, but no statement has been made on this.
Restoration of international services
In June, the airline resumed international services, with the Luang Prabang-Bangkok route being one of the first to restart on June 17. Other international destinations include Cambodia, Vietnam, China, Japan, South Korea and Singapore.
Lao Airlines currently has 11 aircraft, 4 Airbus A320-200s and 7 ATR turboprops.