Vietnam Airlines is reportedly set to sign an initial agreement to purchase approximately 50 Boeing 737 Max jets in a deal estimated to be worth around $7.5 billion. While the deal’s specifics have not been disclosed, it is expected to be worth up to $7 billion at list prices, and bulk purchases often come with discounts. Boeing and Vietnam Airlines have not yet officially commented on the matter.
This deal further solidifies Boeing’s presence in Vietnam, as it already has an agreement with Vietnam Airlines’ competitor, VietJet, for the sale of 200 of its 737 Max planes. Vietnam has been experiencing rapid growth in its aviation market, becoming the world’s fifth fastest-growing market in 2022 when COVID-19 travel restrictions were eased. The International Air Transport Association (IATA) predicts that Vietnam will serve 150 million air transport passengers by 2035.
The Boeing 737 Max jets were grounded globally for several months following two fatal crashes in Indonesia and Ethiopia in 2018 and 2019. They were cleared to return to service at the end of 2020 after extensive safety reviews and modifications.
Vietnam Airlines has been facing financial challenges, reporting a net loss of 1.3 trillion dong ($53.96 million) in the second quarter of this year. The airline attributed these losses to factors like rising fuel prices and other financial risks.
In addition to the commercial deal, Boeing has been in discussions with Vietnamese authorities about the possible sale of military equipment, including drones and helicopters. Boeing is also working on expanding its supplier base in Vietnam.
This agreement comes as U.S. President Joe Biden visits Hanoi, aiming to strengthen ties between the United States and Vietnam.