Lactobionic acid (LBA) was synthesized from the direct aerobic oxidation of lactose under a very low O-2 concentration with high conversion (96%) and 100% selectivity over low loadings (1.02-0.64%) of bimetallic Pd-Bi supported on mesoporous SBA-15 silica material. Under alkaline conditions (pH 9), the catalyst exhibited enhanced activity and stability with unprecedented complete selectivity toward LBA formation. Furthermore, it exhibited pretty good stability toward metal leaching. It was observed that, with a selective deposition of bismuth on palladium, as well as adequate alkaline pH processing, the redox reaction chain performed efficiently and maintained the continuous dehydrogenation of lactose, while avoiding poisoning of the Pd-Bi bimetallic catalyst. Using the Langmuir-Hinshelwood-Hougen-Watson approach, a kinetic model was developed to predict the fates of the lactose and LBA. The rate equation of lactose consumption contains Langmuir adsorption terms, which accounts for the competitive reversible dissociative chemisorption of oxygen and for the reversible associative adsorption of lactose. The kinetic model was verified by comparing the experimental results with those foreseen in the simulation for different experimental conditions. The assessment of the determined Arrhenius parameters led to physically meaningful estimates of activation energy. The Langmuir adsorption isotherms are physically meaningful, where the standard entropy and enthalpy of adsorption were shown to fulfill established guidelines, which assesses the physical sense of their values.