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Vietnamese aviation in motion, but Leahy “disappointed” with VietJet
June 3rd 2016
“We were disappointed with VietJet [Air]. There was clearly some political implication,” said Airbus customers COO, John Leahy. Read More » “But we talked to VietJet, I think we’re pretty close to them, they did get a very, very, very good price from Boeing on that package. We chose not to go after Boeing on the pricing. […] If Boeing is desperate, that’s fine.”
Speaking at the Airbus Innovation Days 2016 in Hamburg, charismatic sales guru Leahy added VietJet told Airbus it is planning to stay with the European manufacturer. “We have the right with Boeing to lease these aircraft out,” the LCC was said to have told Airbus.
Ho Chi Minh-based VietJet last week signed a firm order for 100 B737 MAX 200 aircraft during U.S. president Barack Obama’s state visit, 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.
Contrary to Leahy’s account, VietJet’s CEO, Nguyen Thi Phuong Thao, said the Boeing order “will accommodate our strategy of growing VietJet's coming international route network, including long haul flights".
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.
Speaking to a VN delegate at the IATA AGM in Dublin this week, Orient Aviation was told the flag carrier is scratching its head over how VietJet could possibly run a profitable operation, given its massive and very rapid expansion vis-à-vis record low (sometimes free) fares.
Meanwhile, we were told VN is looking “to add another destination in Australia” soon, while it is currently studying the feasibility of adding Rome and Prague to its network, from where it would connect passengers on to CSA Czech Airlines’ and Alitalia’s networks, its SkyTeam partners.
Japan’s ANA Holdings last week confirmed it would invest $109 million for an 8.8% equity in VN. In 2014, ANA planned to buy into Myanmar carrier, Asian Wings International, but backed away from the deal. ANA's investment in VN would lift the Vietnamese carrier’s premium image, and it would provide it with access to the lucrative U.S. market, where it is currently barred from operating.
