March 02, 2016

Lao Airlines outlook brightens following North Asia expansion and domestic reductions

By:  CAPA - Center for Aviation, March 1 2016

Lao Airlines has rapidly expanded its international operation over the past few years with a focus on North Asia, particularly China. Six international destinations have been launched since late 2012, including four in China and two in South Korea.

Several unprofitable domestic routes have been handed over to a smaller government owned airline, Lao Skyway, enabling Lao Airlines to phase out smaller turboprops. Lao Airlines has expanded its ATR 72 fleet by three aircraft since 2011 while adding four two class A320s.

The new focus on North Asia along with a reduced focus on the domestic market have improved Lao Airlines’ profitability and outlook. However it faces increased competition on international routes within Southeast Asia and will be impacted as Thai AirAsia launches services to Laos, becoming the first LCC in the increasingly popular Lao tourist destination of Luang Prabang.

Lao Airlines is one of Asia’s smallest flag carriers, operating a fleet of four A320s and seven ATR 72 turboprops. It currently serves 14 international and seven domestic destinations.

Lao Airlines has expanded rapidly since taking its first A320 in 2011. The new A320 fleet has enabled Lao Airlines to expand its international operation with a focus on North Asia. Traditionally the airline focused almost entirely on domestic and regional international operations within Southeast Asia.

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