November 2, 2018 / 12:46 PM / 10 months ago

VietJet signs $6.5 billion deal for 50 Airbus jets

French Prime Minister Edouard Philippe and his Vietnamese counterpart Nguyen Xuan Phuc look on as VietJet Air CEO Nguyen Thi Phuong Thao and Airbus Chief Commercial Officer Christian Scherer sign documents during a ceremony in Hanoi, Vietnam November 2, 2018. Nhac Nguyen/Pool via REUTERS

HANOI (Reuters) - VietJet Aviation signed a $6.5 billion agreement on Friday to buy 50 Airbus A321neo jets, the Vietnamese budget carrier said.

The agreement, signed during a visit to Hanoi by French Prime Minister Edouard Philippe, is part of aggressive investment in the Vietnamese airline’s fleet, which has provided lucrative business for both European aerospace group Airbus and its U.S. rival Boeing.

VietJet said the order is in line with its growth strategies and will enhance the airline’s operational efficiency and capacity, especially on international routes.

In addition to the aircraft, Airbus will deploy pilot and technician training programs and fight management and flight safety management for VietJet.

In a separate statement, VietJet said it had also signed a memorandum of understanding with CFM International on a $5.3 billion deal for long-term jet engine maintenance.

VietJet, Vietnam’s biggest private airline, currently operates 60 Airbus jets with more than 385 flights daily within Vietnam and to countries such as Japan, Hong Kong, South Korea, Taiwan, Singapore, China, Thailand, Myanmar and Malaysia.

CEO Nguyen Thi Phuong Thao told Reuters this week that VietJet plans to maintain an average fleet age of only three years to minimize fuel and maintenance costs.

It placed provisional orders for the A321neo jets and 100 Boeing 737 MAX jets at the Farnborough air show and has been in negotiations to complete the deals, with deliveries expected between 2020 and 2025.

Reporting by Khanh Vu; Editing by David Goodman

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