Tuesday, July 11, 2017

Lao Airlines shares for sale?

July 11, 2017 by  

VIENTIANE, 11 July 2017: Lao government says it is ready to recruit new stakeholders for Lao Airlines as part of its efforts to overhaul state-owned enterprises.
Vientiane Times quoted government spokesperson, Chaleun Yiapaoher, saying foreign airlines with “appropriate credentials” were welcome to joint venture with the Lao national flag carrier.
“The government’s intention is not to sell [the whole enterprise], but to seek overseas airline shareholders.”
Details are sketchy but it appears the government would want to retain a majority stake, but possibly sell up to 30% to potential partners and foreign airlines ready to invest in expansion. However, most foreign airlines would expect to have management control. In the long-run it would require a massive change in management DNA and possibly  lead to redundancies to clear so called  ‘dead wood’.
In the past, Lufthansa was closely linked to the Lao airline, but mainly offering technical assistance.
The airline has a long history of seeking foreign partners that resulted in protracted negotiations with potential partners in China and Vietnam that ultimately collapsed.  However, the business environment has changed considerably and foreign airlines may view the market in from a different perspective.
The report claimed some investors have expressed interest and the officials are working with the Lao side collecting information and details. The move to improve the airline’s operations is part of the government’s policy to make government enterprises self sufficient.
Established in 1976, Lao Airlines now has four Airbus 320s and seven ATR aircraft. It flies to Cambodia, China, South Korea, Thailand and Vietnam. Domestically, Lao Airlines operates flights to Luang Namtha, Oudomxay, Luang Prabang, Xiangkhouang, Savannakhet and Champasak.
New routes are planned for the future, including links to capital cities in ASEAN as well as to Hong Kong, Taiwan and Japan.
In 2015, more than 828,000 passengers flew with the airline including  504,000 foreigners. Numbers rose to 924,924 in 2016 including 543,422 foreigners, the report added.
 http://www.ttrweekly.com/site/2017/07/lao-airlines-shares-for-sale/

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