Vietnam's VietJet agrees bumper $9 billion Airbus order

Wed Sep 25, 2013 4:26pm EDT
 
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By Nguyen Phuong Linh

PARIS/HANOI (Reuters) - Low-cost airline VietJet agreed a provisional order for up to 92 Airbus EAD.PA jets worth $9 billion at list prices on Wednesday, stepping up expansion to make its mark in a fast-growing regional market.

Vietnam's first privately-owned airline said it would buy mostly A320 planes, financed by a planned stock market listing as well as loans from foreign banks backed by export credits.

The deal is the latest blockbuster order from Asia's budget carriers for Airbus or Boeing (BA.N: Quote) jets, as a huge surge in the number of middle-class travelers with disposable incomes pushes up industry traffic forecasts.

Wednesday's announcement in Paris confirmed a Reuters report on Tuesday.

Of the 92 jets, 62 are set to become firm orders with purchase rights - or options with undefined delivery dates - for a further 30. The airline plans to lease eight more planes.

The carrier aims for a stock market listing in either Hong Kong or Singapore in 2015 to fund expansion beyond Vietnam, managing director Luu Duc Khanh said.

"This deal is a milestone in our company, it means we are aiming to be a multinational budget airline," Khanh said in a telephone interview.

"Vietjet Air's purpose is expanding to the regional market, not only in the domestic market, so we need to be in the overseas market in order to call in more capital."   Continued...

 
France's Prime Minister Jean-Marc Ayrault (R Rear) and Vietnam's Prime Minister Nguyen Tan Dung (L Rear) attend a protocol agreement signing ceremony, with VietJetAir Managing Director Luu Duc Khan (2ndL) and Christophe Mourey (2ndR), Airbus Head of Contracts and Negotiation, at his Hotel Matignon offices in Paris September 25, 2013. REUTERS/John Schults