NICHOLAS IONIDES / VIENTIANE
Government urges sale of up to 60% of loss-making airline to private investors
Laos's government is aiming to sell up to 60% of Lao Airlines to private investors in line with efforts to modernise and expand the loss-making national carrier.
Airline president Somphone Douangdara says it is hoped a deal can be finalised with a group of foreign investors before year-end. Guy Le Sann, adviser to the president, says the plan calls for between 40% and 60% to be sold in a deal that will include management rights.
"The intention is to modernise the company," says Le Sann, a former Air France Consulting employee, who headed a team that advised the carrier on a turnaround plan last year. "We are now discussing with some foreign companies," he adds.
Lao Airlines, which until recently was known as Lao Aviation, is planning to boost its Airbus fleet to three Airbus A320-family aircraft within four years. On 16 July it put its first A320 into service on its main Vientiane-Bangkok route.
The ex-Ansett Australia twinjet has been leased from Singapore Aircraft Leasing Enterprise for three years and is the only jet type in its fleet, which includes two ATR 72s and Chinese-made Xian Aircraft Y-7 and Harbin Y-12 turboprops. The Y-7s are being phased out and the 17-seat Y-12s will also be replaced.
The carrier hopes the addition of the A320 on international routes will help it boost tourism to Laos and expand its market share.
Le Sann says Lao Airlines plans to add a second A320-family aircraft - possibly an A319 - in time for its winter 2005 operating season. A third is planned in time for the winter 2007 operating season.
New services to Hong Kong and Singapore are planned, he adds, while services to Kuala Lumpur in Malaysia are under consideration.
Last year Lao Airlines carried 200,000 passengers, of which 60,000 were on its international routes serving points in Cambodia, China, Thailand and Vietnam. It expects to carry 400,000 passengers next year, when it hopes revenues will double to $28 million. Somphone says Lao Airlines will continue to suffer losses for the next two years, but the business plan calls for it to be in the black after then.
Source: Flight International
