The Laos government is considering a proposal from stated-owned aircraft manufacturer 
COMAC — formally Commercial Aircraft Corp of China — to acquire at least a 51% stake of state-owned 
Lao Airlines.
Lao Airlines has been struggling to rehabilitate its finances since 2017. It has attempted to overhaul unprofitable domestic routes and reduce staff, but a successful turnaround does not seem to be on the horizon.
Annual revenue at Lao Airlines hovers around $30 million — a tiny fraction of that at such regional counterparts as Thai Airways and Vietnam Airlines. Lao Airlines has just 12 aircraft in its fleet, mostly narrow-body jets seating 100 or so.
Around April, Lao Airlines took delivery of a COMAC C909 regional jet. COMAC is believed to have requested Lao Airlines to use its aircraft. The C909 has been delivered to Vietnam's Vietjet and Indonesia's TransNusa Aviation. Together with Lao Airlines, the three carriers were using the C909 on 15 routes as of mid-June.
It is extremely unusual for an aircraft manufacturer to invest in an airline.
During the 1920s in the US, there was a capital relationship between Boeing and a predecessor of United Airlines. But this ended in the 1930s.
Starting with the acquisition of Lao Airlines, COMAC is expected to build a track record in operating flights in Southeast Asia. This would lead to an expansion into Europe and other regions where there are many aircraft in service.
If COMAC takes control of Lao Airlines, then China could have power over key Laotian transportation infrastructure.
Laos is struggling to repay foreign debt stemming mainly from infrastructure development. Most of the debt is owed to China. There are concerns that if Laos defaults, it would sink into a "debt trap" where China could seize critical infrastructure.
asia.nikkei.com/Business/Busin
COMAC — formally Commercial Aircraft Corp of China — to acquire at least a 51% stake of state-owned Lao Airlines.
Lao Airlines has been struggling to rehabilitate its finances since 2017. It has attempted to overhaul unprofitable domestic routes and reduce staff, but a successful turnaround does not seem to be on the horizon.
Annual revenue at Lao Airlines hovers around $30 million — a tiny fraction of that at such regional counterparts as Thai Airways and Vietnam Airlines. Lao Airlines has just 12 aircraft in its fleet, mostly narrow-body jets seating 100 or so.
Around April, Lao Airlines took delivery of a COMAC C909 regional jet. COMAC is believed to have requested Lao Airlines to use its aircraft. The C909 has been delivered to Vietnam's Vietjet and Indonesia's TransNusa Aviation. Together with Lao Airlines, the three carriers were using the C909 on 15 routes as of mid-June.
It is extremely unusual for an aircraft manufacturer to invest in an airline.
During the 1920s in the US, there was a capital relationship between Boeing and a predecessor of United Airlines. But this ended in the 1930s.
Starting with the acquisition of Lao Airlines, COMAC is expected to build a track record in operating flights in Southeast Asia. This would lead to an expansion into Europe and other regions where there are many aircraft in service.
If COMAC takes control of Lao Airlines, then China could have power over key Laotian transportation infrastructure.
Laos is struggling to repay foreign debt stemming mainly from infrastructure development. Most of the debt is owed to China. There are concerns that if Laos defaults, it would sink into a "debt trap" where China could seize critical infrastructure.
asia.nikkei.com/Business/Busin