Airbus Poised to Sign Deal for Up to 20 Planes With VietJet

(Bloomberg) --

Airbus SE won an order from VietJet Aviation JSC for 20 of its latest A320neo narrow-body jets as the Asian carrier waits on deliveries of Boeing Co.’s grounded 737 Max.

The deal is for the new A321XLR extra-long-range version of Airbus’s work-horse plane, VietJet said in a statement Thursday, adding that it will become one of the first airlines in the world to receive a model unveiled at the Paris Air Show in June once deliveries start in 2023.

VietJet’s order, which is worth $2.8 billion at list prices, comes as Boeing struggles to get the rival Max flying again after the upgraded 737 was grounded following two deadly crashes in five months. The carrier has orders for 200 of the aircraft, four of which were due to be handed over this year.

The purchase was already on Airbus’s books and includes five orders converted from the standard A321neo. It will help VietJet take on state-run Vietnam Airlines JSC and newcomer Bamboo Airways, owned by hotel and leisure company FLC Group JSC.

Carriers are adding planes as Vietnam’s middle class expands and people have more disposable income to fly, underpinned by economic growth of about 7%.

VietJet, the country’s largest privately-owned airline, said earlier this year it would rely more on Airbus jets while waiting on Boeing to resolve the Max crisis. The carrier, which expects international routes to contribute 60% of revenue by 2020, already has 120 Airbus A321neos on order.

VietJet also signed an accord for two additional A320-family simulators for pilot and technician training, taking the number at its academy to three.

Bloomberg reported earlier that the announcement was imminent.

To contact the reporters on this story: Nguyen Dieu Tu Uyen in Hanoi at uyen1@bloomberg.net;Anurag Kotoky in New Delhi at akotoky@bloomberg.net;Siddharth Philip in London at sphilip3@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, ;Anthony Palazzo at apalazzo@bloomberg.net, Christopher Jasper, John Boudreau

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