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HANOI – Two low-cost Vietnamese airlines signed contracts worth $ 20.9 billion on Wednesday for the purchase of Boeing aircraft and General Electric engines, helping their government to deal with the commercial pressures of one of his distinguished guests this week, US President Donald Trump.
The agreements were signed in a presidential palace in Hanoi just after the meeting between Trump and Vietnamese President Nguyen Phu Trong. Trump is in the capital for his second summit with North Korean leader Kim Jong Un, who will start later in the day.
Vietjet Aviation has agreed to buy 100,000 Max aircraft at Boeing for $ 12.7 billion. The deal includes 20 Max 8 and 80 of the newer Max 10 largest variant. The largest budget carrier in the Southeast Asian country has also signed a $ 5.3 billion contract with GE for engines aircraft and maintenance services.
For Vietjet, this purchase constitutes "an important step forward to follow our plan to expand the international flight network with increased capacity," said General Manager, Nguyen Thi Phuong Thao. The airline serves nearly 100 routes in Southeast Asia and Northeast Asia. She is considering new destinations in Australia and India while she is trying to expand in the Asia-Pacific region and beyond.
Bamboo Airways, a new carrier launched in January, also signed a contract to purchase Boeing 787 worth more than $ 2.9 billion.
The Trump administration, whose mission is to reduce major US trade deficits and create more jobs on US soil, has attracted Hanoi's attention. We knew that the purchases were underway, but by signing the agreements in the presence of Trump, Vietnam apparently hoped to appease the president.
"We are going to sign very large commercial agreements and buy a lot of different products from the United States, which we really appreciate," Trump said at the start of his meeting with Trong. "We are reducing the deficit very substantially, like many countries, but I greatly appreciate hospitality – it's really something special."
Vietnam is a thriving market for air transport, with economic growth exceeding 6% per year. More than 100 million passengers used the country's airports in 2018, up 13% from last year.
"The economic expansion in Hanoi and Vietnam is impressive," Kevin McAllister, President and CEO of Boeing Commercial Airplanes, said in a statement. "Vietjet and the country's burgeoning aviation sector are clearly facilitators, helping to boost travel to Vietnam and connect Vietnam to the rest of Asia."
Vietnam Airlines is also planning to buy 50 to 100 Boeing 737 Max this year to replace its former Airbus fleet, said Bloomberg's Duong Tri Thanh, president of the national carrier. The airline also plans to purchase long-range jets to prepare for flights between the Southeast Asian country and California.
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