Vietnam Air gets Gov’t guarantee for fleet expansion

The Prime Minister has approved a guarantee for Vietnam Airlines’ deals to lease and purchase eight Airbus A321-200 planes to support this State-owned corporation’s ambitious flight expansion at home and internationally.
In a recent document of approval, the Prime Minister assigned the Ministry of Finance to represent the Government to provide the guarantee for Vietnam Airlines to have the single-aisle aircraft for its services this year. The Ministry of Justice has been told to assist in legal procedures for the aircraft transactions.
In addition, the Prime Minister has approved the financial plan to purchase 26 Airbus A321-200 that Vietnam Airlines had already ordered from the European aircraft manufacturer Airbus for delivery between now and 2015.
More than three years ago, Airbus clinched US$3.5-billion deals in Hanoi to supply ten A321s and ten medium-capacity A350-900s to Vietnam Airlines, and another ten A321s to Vietnam Aircraft Leasing Co. (VALC). In June 2009, the airline ordered for 16 more A321s and inked a memorandum of understanding for two more wide-body A350s with a total list price of US$1.9 billion.
Last year, Vietnam Airlines selected the International Aero Engines consortium (IAE) as the supplier of V2500 engines designed to improve fuel efficiency for the 36 Airbus A321s ordered by it and VALC. Vietnam Airlines will take delivery of the 26 A321s from this year.
In December 2010, VALC signed a US$184-million deal to buy 20 V2500 SelectOne engines to power the 10 Airbus A321s as well as get support services from IAE. VALC will receive the medium-haul planes in 2012 and 2013 for leasing to Vietnam Airlines in accordance with their contract.
The 10 Airbus aircraft and 20 low-emission engines ordered by the first aircraft leasing company in Vietnam were estimated at more than US$700 million.
Vietnam Airlines now uses some 70 aircraft of Boeing B777s, Airbus A330s, A321s and 320s, ATR 72-500s and Fokkers for more than 300 daily flights on 79 routes to over 20 domestic and 26 international destinations. The national flag air carrier plans to expand the fleet to 115 aircraft by 2015 and 165 by 2020.
This year, the carrier plans to launch direct service between Vietnam and London, using the Boeing B777-200ER for its four weekly flights in the initial period and then seven times per week by 2014.