October 31, 2018 / 9:46 AM / 17 days ago

VietJet aims for young fleet to keep fuel, maintenance costs low - CEO

BANGKOK, Oct 31 (Reuters) - Fast-growing budget carrier Vietjet Aviation JSC plans to maintain an average fleet age of just three years to keep fuel and maintenance costs low and its planes fresh for customers, its chief executive said on Wednesday.

The Vietnamese airline placed provisional orders for 100 Boeing Co 737 MAX jets and 50 Airbus SE A321neos at the Farnborough Airshow in July and is negotiating to firm them up, with deliveries expected between 2020 and 2025, VietJet CEO Nguyen Thi Phuong Thao told Reuters in an interview.

The Farnborough orders in addition to its current fleet of 62 Airbus narrowbody jets has some analysts asking if the carrier has over-ordered. The airline already has firm orders for another 175 Airbus and Boeing jets and is the domestic market leader in Vietnam with a 45 percent share.

However, VietJet expects to receive 30 jets and retire 10 planes, on average, a year between 2020 and 2025 to maintain a young fleet, Thao said.

“At the moment the average age of (the jets) is three years and we want to keep it there,” Thao said on the sidelines of a CEO conference in Bangkok.

VietJet’s average fleet age is around half that of other fast-growing, low-cost carriers in Asia, including Malaysia’s AirAsia Group Bhd, Indonesia’s Lion Air and India’s IndiGo, according to Airfleets.net.

“The main reason is to keep maintenance cost and fuel cost low - and at the same time, customers will have a better experience in new comfortable aircraft,” Thao said.

VietJet this month signed $1.24 billion worth of financing agreements with Japanese and French groups to acquire 10 Airbus jets due to be delivered by early next year.

Thai VietJet, the airline’s franchise in Thailand, plans to add 10 jets a year to its fleet of seven aircraft, VietJet said this month.

Vietjet provides 385 flights daily within Vietnam and to countries such as Japan, Hong Kong, South Korea, Taiwan, Singapore, China, Thailand, Myanmar and Malaysia. (Reporting by Chayut Setboonsarng, additional reporting by Jamie Freed; editing by Darren Schuettler)

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