Boeing Wins $12.7 Billion Deal as VietJet Doubles Down on Max

(Bloomberg) -- Boeing Co. struck a deal to sell 100 more of its 737 Max jetliners to VietJet Aviation JSC, an agreement that will make the Vietnamese discounter the biggest customer in Asia of the planemaker’s largest narrow-body jet.

The memorandum of understanding covers 80 of Boeing’s 737 Max 10 planes and 20 of the 737 Max 8 models, the companies said in a statement Wednesday at the Farnborough air show. The deal is valued at $12.7 billion at list prices before the customary discounts for aircraft purchases.

VietJet is doubling a 737 Max order it announced two years ago during a visit to Vietnam by then-President Barack Obama as the carrier rapidly expands its regional network amid booming travel in Southeast Asia. The airline, known for its bikini-clad flight attendants, will now take a total of 200 737 Max planes and is on pace to become the nation’s largest carrier.

Vietnam’s first privately owned airline said it would use the Max 10 jets to satisfy surging demand on domestic routes as well as travel from Vietnam to other Asian destinations. Boeing launched the newest and largest 737 variant at the aviation industry’s annual trade expo in Paris last year in an effort to counter the sales success of Airbus SE’s A321neo.

The deal with Boeing also includes training and technical assistance in Vietnam, a boost to aviation in the country. VietJet currently relies on expatriate pilots from 40 countries, Nguyen Thi Phuong Thao, the carrier’s president and chief executive officer, told reporters.

“These new airplanes will fit perfectly into our growth strategy, providing the efficiency and range for VietJet to expand its route network and offer more international destinations for our customers,” the airline said in the statement.

©2018 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.