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MARCH 2018

Week 10

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Bamboo Airways signs MoU for 24 A321neo; interested in A321LR

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March 9th 2018

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New Vietnamese carrier, Bamboo Airways, has signed a preliminary agreement with Airbus for the proposed purchase of 24 A321neo. Read More » Bamboo Airways is a subsidiary Vietnamese financial, tourism, mining and real estate conglomerate, FLC Group. FLC has not yet been given approval to launch Bamboo Airways.

Nevertheless, at the signing of the Memorandum of Understanding with Airbus in Hanoi this week, the planned airline also said it would order an equal number of A321LRs after its business license was approved.

“After studying and carefully scrutinising the options, FLC Group and Bamboo Airways have decided to order 24 aircraft from Airbus until 2025,” said FLC chairman, Trinh Van Quyet. “After operating and testing performance, we will calculate the options to cooperate further.”

Bamboo Airways plans to operate domestic and international flights to tourist domestic destinations including cities were FLC hotels and resorts are located.

It will compete against flag carrier Vietnam Airlines, rapidly-growing VietJet Air and Jetstar Pacific. Planned Air Asia Vietnam also is awaiting regulatory approval to launch operations.

VietJet posted a 76% increase in pre-tax profit last year and Vietnam Airlines reported a 27% increase in net profit in 2017.

The biggest challenge to aviation development in Vietnam is infrastructure bottlenecks. Hanoi and Ho Chi Minh City are filling up quickly with slots and ramp space at a shortage.

Addressing the growing congestion, Bamboo Airways said it would fly passengers directly to Quy Nhon, Quang Ninh, Haiphong, Thanh Hoa, Phu Quoc, and Nha Trang.

This week’s agreement was signed by Airbus executive vice president, Jean-François Laval, FLC chairman, Trinh Van Quyet, and Bamboo Airways director-general, Dang Tat Thang.

Laval said Airbus would help expedite the airline’s licence application processes and prioritize A321neo delivery slots in 2022-25.

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