VietJet inked 100 Boeing 737 jets deal
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Boeing Co struck a new deal for 100 passenger jets with Vietnamese budget airline VietJet Aviation JSC VJC.HM on Wednesday, deepening a battle for market share against rival Airbus (AIR.PA) in one of southeast Asia’s hottest markets.
Boeing and VietJet signed the provisional order for 100 Boeing 737 MAX airplanes worth almost $13 billion at list prices at the Farnborough Airshow in southern England.
Of these, 80 are the recently launched 737 MAX 10 – the largest version of Boeing’s best-selling 737 range – and 20 are the benchmark 737 MAX 8 model.
“The growth is incredibly strong in Southeast Asia,” said Boeing Commercial Airplanes CEO Kevin McAllister. “VietJet is a major player there.”
The draft deal comes two years after Boeing upstaged Airbus by clinching an order for 100 737 MAX jets during a visit by then-U.S. President Barack Obama.
Until then, VietJet had only ordered planes from Airbus, including a bumper order for 92 jets in December 2013.
However, aircraft finance industry sources have expressed doubts over whether all the planes on order would be delivered on schedule amid a glut of airplane orders in the region.
VietJet CEO Nguyen Thi Phuong Thao insisted on Wednesday the airline would use both the A320 and 737 aircraft in its fleet and would have “no problem” taking delivery.
The companies said VietJet, one of the fastest-growing carriers in southeast Asia, needed the planes to satisfy surging demand on high-dense domestic routes as well as popular routes throughout Asia.
Vietnam’s first privately owned airline will become the largest MAX 10 customer in Asia once the deal is completed, with deliveries due in 2022-2025, the companies said.
Questions & Answers
Q.What types of Boeing 737 MAX aircraft are included in this provisional order?
What types of Boeing 737 MAX aircraft are included in this provisional order?
The provisional order includes 80 of the recently launched 737 MAX 10 model, which is the largest version of Boeing's 737 range. It also includes 20 of the benchmark 737 MAX 8 model.
Q.Why does VietJet need these new aircraft?
Why does VietJet need these new aircraft?
VietJet needs the planes to meet surging demand on its high-density domestic routes within Vietnam. They also require them for popular routes throughout Asia as the airline is one of the fastest-growing carriers in the region.
Q.When are the deliveries of the new Boeing jets expected to begin?
When are the deliveries of the new Boeing jets expected to begin?
Deliveries of the new Boeing 737 MAX aircraft are due to commence in 2022. The delivery schedule for these planes is expected to run through to 2025.
Q.What was VietJet's aircraft ordering history with Airbus before this deal?
What was VietJet's aircraft ordering history with Airbus before this deal?
Before this deal, VietJet had exclusively ordered planes from Airbus, including a significant order for 92 jets in December 2013. The airline previously ordered 100 737 MAX jets two years ago.
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