Key Points:

  • Vietnam Airlines signs a "landmark deal" with Boeing for an undisclosed number of aircraft, estimated to be worth $7.8 billion, fostering over 30,000 American jobs according to the White House.

  • The deal occurs at a significant time as the US-Vietnam relationship elevates to a “comprehensive strategic partnership,” aligning the US with China and India in terms of diplomatic ties with Vietnam.

  • Despite financial struggles exacerbated by the COVID-19 pandemic, Vietnam Airlines pivots from considering Airbus A321neo jets to sealing a substantial deal with Boeing, a significant shift in its aircraft supplier preference.

Vietnam Airlines Shifts from Airbus to Boeing with New Deal amidst US-Vietnam Strategic Partnership Enhancement

HANOI —During US President Joe Biden’s visit to Vietnam, a crucial deal between Vietnam Airlines and Boeing took shape. This agreement, considered a "landmark deal," is evaluated at approximately $7.8 billion and is expected to facilitate over 30,000 American jobs, the White House noted. However, Monday's statement kept the exact number of aircraft involved undisclosed.

At this significant juncture, where the US and Vietnam have escalated their relationship to a “comprehensive strategic partnership,” the airline deal further cements the ties, elevating the US to the highest level of diplomatic association with Vietnam, akin to China and India. The agreement marks a shift in Vietnam Airlines' strategy, as it presently operates a single-aisle fleet entirely composed of Airbus SE. A report from June suggested that the carrier was contemplating a purchase of up to 50 Airbus A321neo jets.

Representatives from both Vietnam Airlines and Boeing remained unavailable for commentary regarding this development which sees Vietnam Airlines steering away from an all-Airbus fleet, a significant change envisioned since early 2019.

Furthermore, amidst Biden's visit, VietJet Aviation JSC is preparing to reassert a previous agreement for 200 737 Max jets and is set to receive the initial delivery of these US-made single-aisle aircraft. Sources revealed plans for a financing package approximated at $500 million for Boeing crafts. The deal indicates a rejuvenated momentum in Vietnam's aviation sector, despite a challenging period during the COVID-19 pandemic, characterized by financial difficulties and slower recovery compared to other regions.

However, this progress comes with its set of challenges, given the high demand for Airbus and Boeing, which have largely booked their production slots until the end of the decade. Vietnam Airlines, which reported consistent losses since the onset of 2020, navigates a tight space, negotiating delivery timelines amidst financial constraints.

Currently, data from FlightRadar24 exhibits that Vietnam Airlines oversees a mixed fleet of 100 Airbus and Boeing aircraft. In addition, VietJet Air operates 100 Airbus planes with over 300 pending deliveries. This deal foresees a pivotal role in reviving the Vietnamese carriers post-pandemic, hinting at a promising yet challenging roadmap ahead.