Vietnamese carriers sign $21b in aviation deals with US firms

HANOI — Vietnamese carriers signed $21 billion in aviation deals with US firms on Wednesday as US President Donald Trump met with top leaders in Hanoi ahead of his summit with North Korea’s Kim Jong-un.

Trump has urged Hanoi to narrow its gaping trade gap with Washington as part of his “America First” clarion call, urging Vietnam to buy more made-in-USA goods.

The communist country’s aviation sector has boomed in recent years, thanks to a rapidly expanding middle class with growing appetites — and budgets — for air travel.

Three of Vietnam’s top airlines signed several deals for planes, engines and maintenance contracts on Wednesday as Trump met with the country’s top leaders in Hanoi ahead of his much-anticipated second summit with Kim later on Wednesday.

Budget carrier Vietjet — famed for its bikini-clad air hostesses — signed an agreement for 100 Boeing 737 jets worth $12.7 billion, along with training and support contracts, the airline said. 

“We are pleased to expand our partnership with Vietjet and to support their impressive growth with new, advanced airplanes,” Boeing CEO Kevin McAllister said in a statement from the airline.

A senior White House official said the budget carrier will also buy 215 engines made by CFM, a joint venture between America’s GE Aviation and France’s Safran Aircraft Engines.

Startup Vietnamese carrier Bamboo Airways, which made its inaugural flight only last month, will buy 10 787 Dreamliners from Boeing as it looks to grow its nascent fleet and expand its routes to international destinations.

“Vietnam and the US economic and trade relations have seen rapid expansion. Non-stop air routes between the two countries are of essence accordingly,” said Trinh Van Quyet, the chairman of FLC Group, the airline’s parent company.

Bamboo said on Wednesday it wants to start flying to the US later this year or early in 2020.

Direct US routes 

There are currently no direct flights between Vietnam and the US, though the US Federal Aviation Administration has granted Vietnam a “category 1” ranking, paving the way for nonstop travel between the two countries. 

Meanwhile, state carrier Vietnam Airlines signed a $100 million maintenance contract with Sabre Corporation. 

The bundle of deals was praised by the White House, which under Trump’s direction has also been urging its former wartime foe to buy more military equipment.

“These deals will support more than 83,000 American jobs and provide increased safety and reliability for Vietnamese international travellers,” a senior White House official said after the deals were signed.

Vietnam’s aviation sector has soared in recent years, with passenger numbers jumping from 25 million in 2012 to 62 million last year.

But growth is expected to start tailing off, analysts say, in the face of increasingly squeezed airport capacity and tough competition across the region, in particular from budget airlines such as AirAsia and TigerAir. 

Wednesday’s aviation deals came ahead of Trump’s summit with Kim, with the leaders set to meet at the historical Metropole hotel.