VietJet To Buy 100 Boeing 737 MAX

May 23, 2016

VietJet has agreed a firm order of 100 Boeing 737 MAX aircraft worth USD$11.3 billion at list prices, making it one of Southeast Asia's fastest-growing low-cost carriers.

The deal, signed during US President Barack Obama's visit to Vietnam, represents a coup for Boeing, as VietJet has only operated Airbus A320s since it began operations in December 2011.

The airline also signed a USD$3.04 billion deal for Pratt & Whitney engines for the 63 Airbus planes of the 99 it ordered since 2013.

VietJet says it now has 36 Airbuses in service, and the delivery of the Boeing planes, expected during 2019 to 2023, will bring the fleet to more than 200 aircraft by the end of 2023, potentially surpassing flag carrier Vietnam Airlines which now has 89 operating aircraft.

Vietnam Airlines ordered 19 Boeing 787 and 14 Airbus A350s, with 11 of those delivered.

"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," chief executive Nguyen Thi Phuong Thao said in a statement.

VietJet has been expanding rapidly in Southeast Asia while taking on Vietnam Airlines in the domestic market. The Boeing deal is the biggest aircraft order in the country's history.

The budget carrier has a 40 percent share of Vietnam's domestic market and will probably surpass Vietnam Airlines this year as the largest domestic carrier, according to a January report by CAPA Centre for Aviation.

VietJet has ambitions to become a pan-regional low-cost airline, following in the path of AirAsia and Lion Air.

VietJet will be one of the few low-cost carriers to order both Airbus A320s and Boeing 737s, as operating two types of planes is costly. Lion Air is the only other one, starting services with 737s before also ordering A320s and operating both aircraft types concurrently.

The 737 MAX and A320neo are the upgraded versions of both planes that promise better fuel economics and lower running costs.

(Reuters)