Airbus seals US$6.4b VietJetAir order

[SINGAPORE] European planemaker Airbus yesterday finalised an order with VietJetAir for 63 A320 family aircraft worth US$6.4 billion as the budget carrier seeks to expand both at home and overseas.

The purchase agreement covers 42 A320neo, 14 A320ceo and seven A321ceo planes, with an additional 30 purchase rights. The carrier will take delivery of the first plane within this year. Separately, it will lease eight more A320 family aircraft from third-party lessors.

The privately owned VietJetAir, which commenced operations in 2011, has a fleet of 11 leased A320s covering 20 domestic and international routes. It has 26 per cent domestic market share in the country and started eking out a profit in its second year of operations.

The firming up of the order comes after the two companies agreed on a provisional order for largely A320 planes last year.

Chu Viet Cuong, member of the board at VietJetAir, said at a press briefing yesterday that the carrier would use the new aircraft to expand both domestically and in the region. It is setting up a joint venture airline together with Thailand's Kan Air, it said in June last year.

Airbus - which is displaying its new A350 plane this week - said that it may announce an A380 order at the Singapore Airshow.

In an earlier press conference, Airbus management stressed that the Asia-Pacific would continue to fuel global demand for aircraft over the next two decades.

"(The region) is where the action will be for the industry in the coming years, not just in terms of aircraft sales but also support and industrial footprint," said Fabrice Brégier, chief executive of Airbus. He also said that the company would grow its presence in Singapore.

The planemaker expects the region's carriers to take delivery of some 10,940 new passenger and cargo aircraft worth US$1.8 trillion from 2013-2032, or 37 per cent of the 29,200 planes required globally.

In its global market forecast, Airbus said that the fleet of aircraft used by Asia-Pacific carriers would more than double to over 12,130 jets by 2032, as airlines cater to the growing demand for travel.

In particular, Airbus chief operating officer John Leahy stressed the need for carriers to opt for larger, wide-body planes as passenger traffic trends upwards and airports struggle with infrastructure constraints.

Last year, Airbus pipped rival Boeing to deliver about 331 new planes to the region, which is over half of all new planes entering service in the Asia-Pacific, while winning 80 per cent of all new business in the region with 379 firm orders.