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Vietnam Airlines, Boeing reach 10-billion-USD deal for Boeing 737 Max jets

National flag carrier Vietnam Airlines plans to buy 50 narrow-body Boeing 737 Max aircraft in a deal worth 10 billion with the US group Boeing.

Under the document, the two sides will closely collaborate to conduct research and assessment, and promptly report to relevant authorities for consideration, serving as a basis to advance the negotiations and complete investment procedures of Vietnam Airlines.
A memorandum of understanding for the deal was signed between the two sides on September 11, on the occasion of President Joe Biden’s State visit to Vietnam. It holds a special significance in the context that the two nations have elevated their relationship to a comprehensive strategic partnership.

Vietnam Airlines, Boeing reach 10-billion-USD deal for Boeing 737 Max jets

According to Dang Ngoc Hoa, Chairman of the Board of Directors of Vietnam Airlines, in its fleet expansion plan for the 2025-2030 period, with a vision to 2035, purchasing aircraft is crucial to ensure that the firm achieves its strategic goals and vision in the recovery and sustainable development phase.

The narrow-body aircraft investment project aims to serve Vietnam Airlines' development plan, improve the quality of its services on domestic and Asian routes, and modernise its fleet by using modern, comfortable, and fuel-efficient aircraft.

Brad McMullen, Senior Vice President Boeing Commercial Sales, said: “Southeast Asia is one of the world's fastest growing aviation markets, and the 737 MAX is the perfect airplane for Vietnam Airlines to efficiently meet that regional demand.”
Boeing highly values its historic partnership with Vietnam Airlines, dating back to 1995, when the airline first leased Boeing 767s, he added.

Vietnam Airlines said it needs to add about 60 new narrow-body aircraft by 2030 and 100 by 2035.

The Boeing 737 Max series boasts a seating capacity of up to 230 passengers and has a flight range of over 3,000 kilometres. 

Vietnam Airlines' fleet consists of 100 aircraft, including 65 narrow-body aircraft, serving over 97 routes to 50 domestic and international destinations.

Vietjet, Boeing finalise aircraft delivery plan during US President’s Vietnam visit

On the occasion of US President Joe Biden’s State visit to Vietnam on September 10-11, Vietjet and Boeing reached high-level agreements between the two parties.

The contract to purchase 200 Boeing aircraft by Vietjet was interrupted due to the 737 Max’s issues, followed by the consequential impacts of the COVID-19 pandemic on Boeing's global supply chain. Many orders and aircraft delivery plans worldwide have been canceled or indefinitely postponed. Vietjet’s operations, therefore, have been affected. While many airlines refused to fulfill their contracts, Vietjet and Boeing persisted in finding common grounds to meet and establish a mutual long-term strategy to continue the contract.

In particular, Vietjet Chairwoman Nguyen Thi Phuong Thao and Boeing Global President Dr. Brendan Nelson have agreed and satisfied with the commercial agreements. The two sides have included additional terms in the contract of 200 Boeing 737 Max aircraft, with a total value of 25 billion USD and their delivery is scheduled for the next five years. The first batch of 12 aircraft will be delivered to Vietjet in 2024.

Boeing and Vietjet will join hands to make Vietnam a centre for aviation services, including training, education, and maintenance, for both Vietnam and the international market. The two parties will also cooperate in the new technology adoption of artificial intelligence (AI), aviation technology, and green fuels, and reducing emissions in accordance with sustainable aviation criteria. In addition, there will be support for the development of aviation infrastructure, airport operational capability enhancement, and flight management. Boeing will also promote Vietnam's participation in its global supply chain for aircraft production and aviation equipment.

Vietjet's aircraft order is expected to generate 200,000 job opportunities for the US labour market, contributing to the growth of bilateral trade relations, and is a testament for the successful business-to-business tie between the two countries. The achieved results have not only stimulated growth in the aviation industry and the Vietnamese economy but also attracted numerous investors, including major corporations and investors from the US, the world's largest economy.

Both parties have reached commercial agreements with the welcoming and congratulations of the US Special Presidential Envoy for Climate John Kerry. At a high-level conference on investment and innovation on September 11 in Hanoi, President Biden highly valued the opportunities for the two countries to enhance their relationship in such areas as investment and innovation, including the development of the aviation sector.

Source: VNA

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