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Lao Airlines prepares for free Asean sky
Lao Airlines is planning a major investment to improve its business and prepare for stronger competition in the future, according to a senior company official.
“We have to invest in improving our business, otherwise we will not be able to compete in the air services sector in the near future,” Lao Airlines Planning and Cooperation Department Chief Mr Noudeng Chanthaphasouk told Vientiane Times yesterday.
He said that Laos will fulfill all its obligations to the Asean Free Trade Area in 2015 and join the World Trade Organisation (WTO) in the near future, meaning foreign airlines will be able to operate in Laos without facing any investment and marketing barriers.
He admitted that the company will face increased competition once Phongsavanh Airlines begins international air services at the end of this year.
Mr Noudeng said that Lao Airlines had signed a memorandum of understanding with Airbus to purchase two Airbus 320s, adding that the company expects to receive the first jet-powered aircraft in October and the other in November.
He said that the company would not be revealing what price it paid for the 140-seater aircraft as the information is confidential between the two business partners. However, he noted the government had provided the company with financial support to make the purchases.
In regards to Lao Airlines becoming a public company by listing on the Lao Securities Exchange, Mr Noudeng said that the management of the company would like to list on the exchange but there is a lot of work to be done before the company can become publicly-owned.
He said the decision to purchase more aircraft was part of efforts to improve the company's business operations ahead of listing on the stock market.
“If we don't improve our business and buy more aircraft, the public won't see improvements in our company and they may not buy stock in the company,” he said.
Mr Noudeng said Lao Airlines expects to take about one or two years to improve its business operations before it is ready to list on the stock market.
The securities exchange is a new channel for state enterprises to mobilise long-term investment funds. However, companies must prove themselves to be transparent, accountable and profitable before they are permitted to list.
At present, Lao Air lines operates propeller aircraft, including French ATR and Chinese M60, on flights to Thailand, China, Cambodia and Vietnam. The company plans to open a direct flight to Singapore at the end of this year.
vientiane times
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