The Lao government is weighing a proposal from China’s Commercial Aircraft Corporation (COMAC) to acquire a controlling stake in Lao Airlines, part of a sweeping reform agenda aimed at revitalizing key state-owned enterprises that have faced persistent financial challenges.
The proposal, which has stirred debate within the latest National Assembly meeting, could result in one of the most significant foreign partnerships in the country’s aviation sector to date.
In May, COMAC formally requested a minimum 51 percent stake in Lao Airlines through a joint venture agreement, according to Lao state media. This request, submitted in October 2024, comes alongside calls to exclude the airline’s existing debt from the deal, an issue that remains a sticking point for lawmakers.
Prime Minister Sonexay Siphandone confirmed during the 9th Ordinary Session of the 9th Legislature in June that Lao Airlines is one of four state enterprises undergoing urgent reform, along with Electricité du Laos, the Lao State Fuel Company, and the Nayoby Bank.
He acknowledged the seriousness of COMAC’s interest, framing it within the broader goal of improving operational efficiency across public sectors.
The proposal has elicited a divided response in parliament. National Assembly member Valy Vetsaphong expressed concern over relinquishing a majority stake in an asset deemed strategically vital.
She argued that Laos would be better served by appointing qualified executives to improve management rather than selling control to a foreign entity, as reported by the Vientiane Times, she also stressed that no foreign partner should be allowed to interfere in the airline’s core operations or receive subsidies.
State media also reported that another member of the Assembly voiced support for a phased ownership model, suggesting that the Lao government could initially sell a larger share to COMAC, but retain the right to repurchase shares in the future.
This would allow for technical and managerial expertise to be transferred to Lao Airlines while preserving long-term national control.
A key part of the proposed partnership is fleet integration. COMAC has requested that Lao Airlines begin using its aircraft for regular operations, a condition already partially fulfilled.
COMAC Jet Launches as Audit, Partnership Talks Continue
Lao Airlines began operating the COMAC C909 jet in April. The aircraft, configured with 90 economy seats, now services key domestic routes including Vientiane–Pakse and Vientiane–Savannakhet. Expansion to Chinese destinations is planned, aligning with COMAC’s broader strategy to deepen regional engagement.
To support this integration, COMAC has deployed a specialized team to assist Lao Airlines in preparatory tasks such as operations manual development, aviation material supply, maintenance capacity building, and crew training.
As the government continues deliberations, an independent audit of Lao Airlines is underway to determine the carrier’s asset value, a crucial step in finalizing any equity arrangement.
The outcome of this potential deal could have wide-ranging implications for foreign investment in Laos’ state-owned sectors and for the future of its national airline.
The decision is expected in the coming months as lawmakers and government officials weigh the long-term economic benefits against concerns over national sovereignty and control of strategic infrastructure.