Lack of adequate transportation facilities continues to be a major deterrent to economic progress. Of the approximately 14,000 km (8,700 mi) of roads, only about 3,360 km (2,088 mi) were paved in 2002; many are impassable in the rainy season. Only a single major road connects the northern and southern regions. Most of the roads were damaged by US bombing in the Vietnam war, but the main links with Vietnam (notably Highway 9, from Savannakhét to the Vietnamese port of Da Nang, and Highways 7 and 13, from Vientiane and Savannakhét to the Vietnamese port of Vinh and Ho Chi Minh City, respectively) are being rebuilt with Vietnamese aid. Under the 1981-85 economic plan, 844 km (524 mi) of roads were built or improved. The 1986-90 plan projected an additional 1,500 km (932 mi), 50% of which was to be asphalted. There are no railroads in Laos, although in 1994, the government entered into an agreement with a Thai company to build a railroad from Nong Khai in Thailand to Vientiane.
In 2001 there were 51 airports, only 9 of which had paved runways. Vientiane has the only international airport. Major cities in Laos are connected by air services operated by state-run Lao Aviation, founded with Soviet aid in 1976. In 1995, the government signed an agreement with China's Yunnan Airlines forming a joint venture projected to increase Yunnan's holdings of Lao Aviation to 60% while the former pays off the latter's debt. In 2001 210,800 passengers were carried on scheduled domestic and international airline flights.
Landlocked, Laos' only water-transport link with the outside world is via the Mekong River, which forms a large part of the border with Thailand and flows through Cambodia and Vietnam into the South China Sea. The Mekong is navigable for small transport craft and, with its tributaries in Laos, forms a 4,587-km (2,850-mi) inland waterway system, although rapids make necessary the transshipment of cargo. To lessen dependence on Thailand, Laos in 1977 signed an agreement with Vietnam whereby the Vietnamese port of Da Nang would replace Bangkok as the chief outlet for Laos. In 2002, Laos had one merchant vessel, a cargo ship at 2,370 GRT.