Vietnam’s Vietjet Aviation to purchase 50 A321neo from Airbus in a $6.5 billion deal

The deal was finalized during French Prime Minister Edouard Philippe’s visit to Hanoi.

According to sources familiar with the matter at hand, Vietjet Aviation, a budget air carrier that is growing rapidly, is set to finalize a $6.5 billion jet order with Europe’s Airbus, said French Prime Minister Edouard Philippe during a visit to Hanoi.

The order for 50 A321neo jets is part of an aggressive investment in the Vietnamese airline’s fleet that has provided lucrative business for both Airbus and Boeing.

The order bodes well for Airbus as it seeks to turn a raft of provisional orders, which it collected during July’s Farnborough Airshow, into hard cash.

The deal marks the biggest economic component of an official visit to Vietnam, a former French colony by Philippe from November 2-4, during which he will oversee deals with French firms and hold talks with Vietnamese counterpart Nguyen Xuan Phuc..

Vietjet and Airbus both declined to comment.

Incidentally, France and Vietnam had signed an agreement in September to expand defense collaboration, details of which have not been provided.

According to Nguyen Thi Phuong Thao, CEO of VietJet, Vietjet plans on maintain an average fleet age of just three years to keep fuel and maintenance costs low.

VietJet has also placed provisional orders for the A321neo jets as well as 100 Boeing 737 MAX jets. Deliveries for the same are expected between 2020 and 2025.

However, according to sources from the aircraft finance industry, it is doubtful whether all of the planes ordered by Vietjet will be delivered on schedule given the glut of airplane orders from Asia.

Incidentally, Vietnam’s expansion has also been peppered with trade sensitivities as Vietjet juggled Airbus and Boeing procurements, a strategy also designed to win bigger discounts.

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