PARIS 2015: VietJet Air adds 6 A321s

VietJet Air has ordered a further six Airbus A321s all for delivery in 2017, adding to the sizeable orderbook it already holds with the OEM.

Announcing the order, the airline’s vice-chairman Nguyen Thanh Hung noted that “since day one VietJet Air has been exceeding expectations” and has carried more than 13 million passengers with load factors averaging around 90%.

Nguyen Thi Phuong Tao, president and CEO of VietJet Air (pictured), explained why, after placing a large order – 63 aircraft, including 42 A320neos, 14 A320ceos and seven A321ceos, plus 30 purchase options and the lease of seven other A321s – with Airbus at the 2014 Singapore Air Show, the airline had returned for more aircraft. “We signed for A320neo family aircraft last year, but found that [with the growth being experienced] for 2017-18 we needed more aircraft,” she said, adding that the new aircraft will be configured with 230 seats.

The airline has a 25 aircraft fleet at present with an average less than three years operating 30 routes. It has gained a 40% domestic market share.

Tao admitted that the company has low-fare, long-haul ambitions. “We are very seriously studying the opportunities. We could do it soon – it is part of our strategy over the next few years,” she remarked. “In the US we have about 3 million Vietnamese who like to visit home. They are waiting for direct flights. Together with Airbus we are looking at options. In the near future we might come back with good news.

“We also hope that we can come back with an additional order for single-aisle aircraft, as we need aircraft for our joint venture companies, such as in Thailand. Right now in Thailand we don’t have enough aircraft. And there is room for even more aircraft in other countries such as Myanmar, Laos and Cambodia,” Tao commented.

Vietjet also used the occasion to sign agreements with various partners in the fields of finance and insurance.

First, the airline signed a $60 million credit agreement with BNP Paribas which will finance a mixture of six A20s and A321s scheduled for delivery between now and the end of 2017.

Following that, Vietjet signed a major contract with several partners for its fleet’s insurance package for 2015-2016 worth $1.5 billion. Willis Group Holdings and JLT Group were both appointed as brokers along with Vietnam-based insurers, Bao Viet Holdings Company, PetroVietnam Insurance Joint Stock Corporation (PVI) and Global Insurance Corporation (GIC).

Bernie Baldwin, editor, Low-Fare & Regional Airlines/
Le Bourget, Paris, France

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