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VietJet tackles Vietnam Airlines with 100 B737 MAX order and ANAH confirms investment in the flag carrier
May 27th 2016
VietJet Air was in the headlines this week after it signed a firm order for 100 B737 MAX 200 aircraft, worth $11.3 billion at list prices, with deliveries scheduled from 2019 to 2023. It was Boeing’s biggest order from Vietnam to date and will bring the low-cost carrier’s fleet to more than 200 aircraft by 2023, surpassing flag carrier Vietnam Airlines’ (VN) fleet for the first time. Read More »
Vietjet’s order was the first for Boeing at the carrier. Until now, the LCC has been an all-Airbus carrier, operating 32 A320 Family aircraft with another 85 of the type on firm order, according to FlightGlobal.
The agreement was signed during Barack Obama's visit to Vietnam and was witnessed by the U.S. president. "Our investment in a fleet of 737 MAX 200s will accommodate our strategy of growing VietJet's coming international route network, including long haul flights," the LCC’s CEO, Nguyen Thi Phuong Thao, said in a statement.
VietJet ordered CFM International’s LEAP-1B to power the 100 B737s. The CFM deal is valued at $3 billion at list prices and includes 15 spare engines. It also recently agreed to establish a joint VietJet-Airbus flight and maintenance training facility at its Ho Chi Minh base.
VietJet has been expanding rapidly in Southeast Asia and now holds 40% of Vietnam’s domestic market.It will surpass VN this year as the largest domestic carrier, forecast consultancy CAPA.
In response, VN said last week it would boost its domestic and regional network with new schedules, more frequency and capacity increases. Domestically, VN is planning to build capacity by 20%, using wide body aircraft on existing routes, including its 22-daily Hanoi-Ho Chi Minh flights, the 15-daily Ho Chi Minh-Da Nang service and the twelve-daily Hanoi-Da Nang schedule service. Frequencies to Nha Thrang and Phu Quoc will increase.
Regionally, the flag carrier will increase its A321 Hanoi-Yangon and Ho Chi Minh-Yangon frequency from five-weekly to daily and will replace the ATR72 with the larger A321 from Da Nang to Siem Reap and Hanoi to Luang Prabang.
Also planned is the upgrading of its Hanoi-Heathrow and Ho Chi Minh-Heathrow B787-9 routes from six-weekly to daily from July, respectively, to feed into its expanded domestic and regional network. It has ordered 19 B787s and 14 A350s, with 11 of those delivered.
Japan’s ANA Holdings confirmed at press time that it would invest US$109 million for an 8.8% equity in Vietnam Airlines. In 2014, ANAH planned to buy into Myanmar carrier, Asian Wings International, but backed away from the deal. ANAH's investment in VN would lift the Vietnamese carrier’s premium image and significantly strengthen its trans-Pacific network.
