Lao Airlines’ outlook will brighten as the airline extends its network to North Asia and spins off unprofitable domestic routes to a subsidiary, according to Centre for Asia Pacific Aviation’s recent analysis.
The airline is currently focusing its attention on North Asia. Six international destinations have been launched since late 2012, including four routes in China and two in South Korea.
The airline currently serves six destinations in mainland China – Changsha, Changzhou, Chengdu, Guangzhou, Jinghong and Kunming – along with Busan and Seoul Incheon in South Korea.In addition, 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 has improved Lao Airlines’ profitability and outlook. However it faces increased competition on international routes within Southeast Asia especially from Thai AirAsia which will become the first LCC to serve Luang Prabang.
Currently, the airline operates a fleet of four A320s and seven ATR 72 turboprops. It serves 14 international and seven domestic destinations.