In September 1976, the company was formed from the merger of existing airlines Royal Air Lao and Lao Air Lines. The company became Lao Aviation in 1979. In 2000, a joint venture with China Yunnan Airlines and the Lao government was formed, which re-nationalized Lao Aviation. The A320s are the first jet aircraft to be purchased by Lao Airlines and feature a two-class layout seating 126 passengers in the main cabin and 16 in Business Class and are powered by CFM International CFM56 engines.
On 1 September 1979, a Lao Aviation Antonov An-26 force-landed in a corn field at Ban Mai, Thailand, due to fuel exhaustion after the pilot became disorientated in heavy rain; all 74 passengers and crew survived, but the aircraft was substantially damaged; the aircraft was repaired and flown back to Vientiane on 31 January 1980 where it was written off after crashing on landing.
On 22 April 1990, a Lao Aviation Antonov An-24RV overshot the runway at Luang Namtha Airport after an aborted takeoff; the aircraft collided with a building, killing one; all three on the aircraft survived.
On 13 December 1993, a Lao Aviation Harbin Yunshuji Y-12-II crashed on approach to Phonesavanh Airport after clipping trees in fog, killing all 18 on board.
On 25 May 1998, a Lao Aviation Yakovlev Yak-40 crashed in the jungle in heavy rain near Long Tieng, Xiangkhouang Province, killing all 26 on board. The aircraft was carrying a Vietnamese military delegation from Vientiane to Xiangkhouang.
On 19 October 2000, Lao Aviation Flight 703, a Harbin Yunshuji Y-12-II, crashed into mountainous terrain in bad weather while on approach to Sam Neua Airport en route from Vientiane; eight of 17 on board died.
On 14 February 2002, a Lao Aviation Harbin Yunshuji Y-12-II crashed on the runway while taking off from Sam Neua Airport due to a wind gust; all 15 on board survived, but the aircraft was written off; the engines were sent to Singapore to be rebuilt, the fuselage was cut up and sent to Vietnam for scrap metal.
On 16 October 2013, Flight 301, an ATR 72-600 twin turboprop carrying 44 passengers and 5 crew, crashed into the Mekong River, at about 16:00 local time; all 49 on board died. The aircraft was flying from Vientiane to Pakse in Champasak Province in southern Laos, and was attempting to land in bad weather associated with Typhoon Nari.
