[Source/Observer Network, Chen Sijia] According to a June 13 report by the Hong Kong South China Morning Post, the Commercial Aircraft Corporation of China (COMAC) has proposed acquiring the majority shares of Lao Airlines, and the Lao government is considering the relevant proposal. As COMAC seeks to expand its presence in Southeast Asia, the Lao government is studying reforms for state-owned enterprises such as Lao Airlines to improve their continuously loss-making operations.

Prime Minister Sonexay Sithdamone of the Lao government stated on June 9 at the National Assembly that four state-owned enterprises, including Lao Airlines, Lao Electricity Company, Lao National Fuel Company, and Nayobay Bank, are undergoing reforms. "The government is considering COMAC's comprehensive investment proposal, especially its proposal to hold at least 51% of Lao Airlines' shares," he said.

The Vientiane Times reported that COMAC and Lao Airlines signed a memorandum of understanding in October 2024 to establish a joint venture. An independent audit company is currently conducting an audit to determine the total value of Lao Airlines' assets.

Sonexay revealed that COMAC hopes Lao Airlines can use its manufactured aircraft for commercial flights. Lao Airlines has already taken this measure by adding a COMAC C909 aircraft to its fleet in April this year. The Vientiane Times noted that this aircraft, with 90 economy-class seats, has been deployed on major domestic routes such as Vientiane-Basae and Vientiane-Savannakhet.

The first C909 aircraft delivered by COMAC to Lao Airlines, Visual China

According to Lao Airlines, the company has formulated plans to expand its business to other destinations, particularly Chinese destinations. COMAC provides comprehensive support services to ensure operational standards meet strict international safety regulations.

The proposal to acquire Lao Airlines is seen as COMAC's latest step in expanding its presence in Southeast Asia. Aviation analysts told the South China Morning Post that China's investments in Southeast Asia can create more orders for the C909 and C919 aircraft. "Many operators in Southeast Asia lack technology or funds, so such investments and joint ventures are valuable," they said.

The report cited an example: Indonesia's Lion Air was acquired by Chinese investors in 2020 and became the first overseas airline to operate COMAC aircraft two years later. Its C909 fleet has expanded to include domestic and international routes connecting Jakarta, Bali, and Guangzhou.

In the opinion of analysts, COMAC's expansion in Southeast Asia is a rational choice. Laos is a highly potential market; it has good relations with China and is the only landlocked country in Southeast Asia, making its transportation industry heavily reliant on aviation. Since many Southeast Asian countries are willing to recognize China's airworthiness and safety standards, it is easier to increase the overseas profile of the C909 and C919 in Southeast Asia.

Besides Laos, Vietjet Air of Vietnam reached an agreement earlier this year to lease two C909 aircraft from Chengdu Airlines of China. The South China Morning Post pointed out that COMAC's investments in Southeast Asia can demonstrate the reliability and adaptability of its aircraft in foreign markets, which may help promote certification by global regulatory agencies.

This article is an exclusive contribution by the Observer Network and cannot be reprinted without permission.

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