US planemaker Boeing Co. secured deals to provide aircrafts to Vietnamese airlines Bamboo Airways Co. Ltd. and VietJet Aviation JSC, as the companies seek for bigger operations in Asia and beyond.
The two carriers formally announced on Wednesday that they will be purchasing a total of 110 planes worth $15.7 billion from Boeing, with 10 orders of the wide-bodied 787-9 Dreamliner for Bamboo and 100 of the 737 Max for VietJet. The orders were valued at $2.9 billion and $12.7 billion respectively.
The deal came at the time of US President Donald Trump’s visit to Hanoi for a second summit with North Korean Supreme Leader Kim Jong-un.
The White House put the overall worth of the agreements at more than $21 billion, with a senior official saying the deals will support over 83,000 US jobs and provide increased safety and reliability for Vietnamese international travelers.
VietJet’s 100-aircraft commitment was provisionally revealed during the Farnborough air show in July 2018 and was confirmed later that year.
Boeing said the VietJet purchase, which was previously labeled as an undisclosed order on its books, took the airline’s MAX orders to 200 jets and included 80 of its latest 737 MAX 10 model.
The first four planes, ordered as part of the prior 100-aircraft agreement, are expected to be delivered this year, according to VietJet Chief Executive Nguyen Thi Phuong Thao.
Boeing stated that the arrangement with Bamboo was already on its order book as an unidentified customer. Bamboo Chairman Trinh Van Quyet also announced plans to buy 25 narrow-bodied 737 planes from the Illinois-based planemaker.
While the Vietnamese carrier, which is owned by holding firm FLC Group, had made a provisional order in 2018 for 20 Boeing 787 jets worth $5.6 billon at list prices, Wednesday’s deal is a separate transaction from that.
Seeking for Further Growth
Quyet said the purchases are part of their strategy to expand their operations on the international market, including flying to the US and Europe.
Vietnam’s airlines are growing their fleets further as growing incomes and the region’s improving economies are drawing in more people to fly for the first time, raising demand in Asia, whose air-travel market is seen outperforming that of North America and Europe combined.
Demand in Vietnam is also projected to rise after the US Federal Aviation Administration (FAA) in January approved the nation’s air-safety system, enabling airlines to start offering direct flights to the US and codeshare with the country’s carriers.
Bamboo plans to start international flights in the second quarter this 2019, according to Quyet, with initial destinations in Japan, South Korea, Thailand, Singapore, ahead of non-stop flights to the US later this year or early next.
Trump has urged North Korea to follow Vietnam’s path to economic prosperity, stating that the isolated country could thrive just like Vietnam if it would denuclearize.
Data from a Vietnamese customs showed Vietnam’s trade surplus with the US reached $34.8 billion last year, ending above a surplus of $32.2 billion registered in 2017.
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