Vietnam Airlines JSC signed an agreement to buy Boeing Co. aircraft during a visit by US President Joe Biden to the Southeast Asian nation.
The “landmark deal” is worth about $7.8 billion and will support more than 30,000 American jobs, the White House said in a statement Monday.
Bloomberg News reported Sunday that Vietnam Airlines was poised to sign a deal for 50 Boeing 737 Max planes. Monday’s statement didn’t disclose the number of aircraft.
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The order comes at a pivotal moment for US ties with Vietnam. On Sunday, Hanoi upgraded its relationship with Washington to a “comprehensive strategic partnership” — putting the US on the highest level with China and India.
The deal is also a breakthrough for Boeing as Vietnam Airlines’ single-aisle fleet is currently all Airbus SE. The carrier had been weighing an order for as many as 50 Airbus A321neo jets, Bloomberg News reported in June.
The Hanoi-based carrier and Boeing representatives didn’t respond to requests for comment.
Also during Biden’s visit, budget carrier VietJet Aviation JSC plans to reaffirm a deal for 200 737 Max jets it ordered and take delivery of the first of the US-made single-aisle jets, people with knowledge of the matter said. It will also ink a financing package worth about $500 million for Boeing aircraft, they said.
Airlines typically negotiate discounts from industry list prices for aircraft.
Like many others, Vietnamese carriers struggled throughout the Covid-19 pandemic and have been slow to recover as international borders in the region took longer to reopen than in other parts of the world.
Vietnam Airlines has lost money every quarter since the start of 2020. It reported an after-tax loss for the second quarter of 1.3 trillion dong ($54 million), narrowing from 2.6 trillion dong in the same period last year.
Former Chief Executive Officer Duong Tri Thanh said in an interview in early 2019, prior to the pandemic, that the carrier was considering an order of 50-100 Boeing 737 Max jet to replace its Airbus fleet.
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There will be challenges for the financially-strapped carrier in getting aircraft delivered in the near term, given that Airbus and Boeing have sold out most of their production slots through the end of the decade.
Vietnam Airlines operates a fleet of 100 Airbus and Boeing aircraft, FlightRadar24 data show. VietJet Air has 100 Airbus planes in operation and more than 300 aircraft pending delivery.
(Updates with confirmation of order from US.)