Boeing Co won an order for 100 jets from VietJet Aviation Joint Stock Co valued at US$11.3 billion in list prices as Vietnam’s only private airline expands fleet amid a surge in travel.
VietJet signed the agreement yesterday in Hanoi during US President Barack Obama’s visit to Vietnam. Delivery of the Boeing 737 MAX 200 airplanes is to run for four years beginning in 2019 and is expected to help the carrier expand its fleet to 200 by the end of 2023, the company said in a statement.
The low-cost carrier, which started operations in December 2011, is seeking to expand in a market that’s grown 20 percent annually over the past three years, according to the airline.
Photo: Reuters
VietJet operates more than 250 flights per day with 50 routes in Vietnam and across the region to nations such as Taiwan, Thailand, Singapore, South Korea, China, Myanmar and Malaysia.
“They seem to be extremely ambitious,” said Brendan Sobie, Singapore-based chief analyst at the CAPA Centre for Aviation. “They have established themselves domestically with a strong brand and high share of the market in a very quick time.”
VietJet will probably surpass national carrier Vietnam Airlines as the nation’s biggest domestic carrier this year, according to the center.
Vietnam is expected to rank among the world’s 10 fastest-growing aviation markets in the next two decades, according to the International Air Transport Association.
The Boeing aircraft “will accommodate our strategy of growing VietJet’s coming international route network, including long-haul flights,” CEO Nguyen Thi Phuong Thao said in a statement.
The airline, known for its bikini-clad flight attendants, expects revenue to double this year from last year’s 10.9 trillion dong (US$488.4 million) and to increase passenger capacity to 15 million after carrying 9.3 million last year.
The carrier might come out with an initial public offering as early as the second quarter, as it plans to build global routes and become a top budget airline in Asia, Thao said in an interview earlier this year.
“Vietnam doesn’t have as many low-cost carriers as other markets — it was underserved while other markets were overserved,” Sobie said. “They had the timing. They entered into the market as Vietnam’s economy was growing.”
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