Vietnam Airlines has officially confirmed an order for 50 Boeing (NYSE:BA) 737 MAX 8 aircraft, marking a significant milestone for Boeing (NYSE:BA) in the Vietnamese aviation market. The confirmation was announced during a signing ceremony attended by President Joe Biden, Secretary of State Antony Blinken, White House officials, and Vietnamese government leaders on Monday.
Dang Ngoc Hoa, Chairman of the Board of Directors of Vietnam Airlines, expressed that this deal aligns with the airline's strategic fleet plan for 2025-2030 and its long-term vision through 2035. The investment in these new narrowbody aircraft is a pivotal initiative to support the airline's recovery and growth, enabling enhanced service on domestic and Asian routes and the modernization of its fuel-efficient fleet.
On Tuesday, Vietjet's Chairwoman Nguyen Thi Phuong Thao and Dr. Brendan Nelson, president of Boeing Global agreed to supplement the contents of the previously interrupted $25 billion contract for 200 737 Max aircraft. The contract had been disrupted due to Boeing's ability to supply aircraft worldwide and the subsequent impact of the COVID-19 pandemic. Despite the challenges, both companies found common ground to continue implementing the contract as part of a long-term strategy.
Vietjet's decision to reaffirm its commitment to the contract was announced during a meeting between Thao and Nelson in Hanoi. The first batch of 12 jets will be delivered to Thai VietJet, Vietjet's Thailand subsidiary.
The cooperation between Vietjet and Boeing dates back to 2016 when a contract for 100 aircraft was signed during then US President Obama's visit to Vietnam. Two years later, the order increased to 200 aircraft. This collaboration has contributed significantly to bilateral trade relations between Vietnam and the United States, creating approximately 200,000 jobs for Americans.
These recent agreements between Boeing and the two major Vietnamese airlines come amidst a global recovery in air travel. The 737-8, a key model in these deals, offers flexibility across airline networks while reducing fuel use and emissions by up to 20%. According to Boeing, each 737-8 airplane will save up to 8 million pounds of CO2 emissions annually compared to those airplanes it replaces. The company has secured more than 400 737 MAX family orders in 2023 alone.
Despite financial challenges faced by Vietnam Airlines, the decision to acquire these narrowbody aircraft is crucial for the airline's competitiveness in one of the world's fastest-growing aviation markets. This move is expected to attract more domestic and foreign investors, including large corporations and investors from the United States.
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