Vietjet inks $6.5 bn deal with Airbus for 50 planes

Vietjet annouced plans to buy 50 new Airbus planes
Vietjet annouced plans to buy 50 new Airbus planes

Airbus signed a deal with Vietnamese budget airline Vietjet for 50 new planes worth $6.5 billion in Hanoi on Friday during a visit by the French premier to the fast-growing communist nation where the aviation sector is booming.

The deal for 50 A321neo Airbus planes was part of a raft of agreements signed between Vietnam and France, one of Hanoi's top European trading partners that is eager to boost investments in the former colony.

Vietnamese airlines have been eagerly growing fleets to serve burgeoning passenger numbers, where domestic travel has soared in recent years and international air travel is one the rise.

Vietjet also inked a Memorandum of Understanding worth $5 billion with France's Safran group for 100 engines and equipment maintenance, the document said.

"These contracts reflect the growing intensity of economic ties between the two countries," French Prime Minister Philippe said after the signing.

Vietjet stormed onto Vietnam's airline sector in 2011 when much of the market was dominated by the national carrier Vietnam Airlines.

The country's first budget carrier, owned by Vietnam's only female billionaire Nguyen Thi Phuong Thao, has raised eyebrows with its racy marketing campaigns featuring nearly-naked models and by staffing inaugural flights with air hostesses wearing bikinis.

In just five years Vietjet quickly caught up with Vietnam Airlines to capture 42 percent of the domestic market in 2016, and 27 percent of the total market, according to data from the CAPA Centre for Aviation.

Over the past two years it has turned its attention to adding more international routes to its roster, including to Japan, South Korea and Taiwan, as it seeks to serve Vietnam's growing middle class with a thirst—and cash—for travel.

The number of passengers travelling internationally jumped to 30 million in 2017 from 23 million the year before, according to official Vietnam aviation data.

From foes to friends

The French premier is in Vietnam for a three-day visit largely aimed at drumming up business deals with one of Asia's fastest growing economies, which clocked 6.8 percent GDP growth last year.

Both sides signed deals worth a total of nearly $12 billion, including in the energy and IT sectors.

Trade between the former colonial foes has boomed in recent years, and France is now Vietnam's third leading European trading partner after Germany and Italy, with two-way trade hitting $7.6 billion last year, according to the French Prime Minister's office.

Vietnam, an export-driven manufacturing hub with a population of 93 million people, has eagerly courted trading partners in Europe after the United States pulled out of the sprawling Trans-Pacific trade pact that Hanoi stood to gain enormously from.

"France is one of Vietnam's top partners, and is always a priority in Vietnam's foreign policy, we have close and binding exchanges," Vietnamese Prime Minister Nguyen Xuan Phuc told reporters after the signing Friday.

The French premier sidestepped commenting on thornier topics—including Vietnam's dismal rights record and an incoming cybersecurity law that has drawn international scorn—at the press conference Friday, where journalists were barred from asking questions.

The cyber law set to come into effect in January will increase the government's control over online content and user data, which critics have said will likely be used to further silence dissent in the one-party state.

Philippe is set to visit Dien Bien Phu on Saturday, the site of the epic battle between France and Vietnam in 1954 that would spell the end of France's colonial empire in Indochina and pave the way for Vietnamese independence.

"We share a common past, a tragic past but a common past," Philippe said Friday.

The French premier's trip also includes a stopover in the bustling economic hub Ho Chi Minh City on Sunday where he will inaugurate a French medical centre and host a business forum with French tech entrepreneurs before heading to New Caledonia.


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© 2018 AFP

Citation: Vietjet inks $6.5 bn deal with Airbus for 50 planes (2018, November 2) retrieved 31 October 2020 from https://phys.org/news/2018-11-vietjet-inks-bn-airbus-planes.html
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