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Zenger
World
Bibhu Pattnaik

Vietnam Airlines Considers $10 Billion Deal With Boeing

A Vietnam Airlines Boeing 787-9 Dreamliner aircraft. The airline is nearing a major deal with Boeing. (Patrick Becker/ullstein bild via Getty Images)

In a strategic move that could potentially reshape its fleet, Vietnam Airlines JSC is nearing a monumental deal with Boeing Co. (NYSE: BA).

The agreement, which is still in its initial stages, involves the acquisition of about 50 Boeing 737 Max jets, a transaction that is estimated to be valued at a staggering $10 billion, according to individuals with knowledge of the matter, Bloomberg reported.

The national carrier, which has been navigating through financial turbulence, is planning to formalize the agreement through a memorandum during a visit by President Joe Biden to Vietnam. The prospective deal not only signifies a massive win for Boeing but also marks a departure for Vietnam Airlines from its existing all-Airbus single-aisle jet fleet.

A Vietnam Airlines Boeing 787-9 Dreamliner aircraft. The airline is nearing a major deal with Boeing. (Patrick Becker/ullstein bild via Getty Images)

The airline is reportedly looking to replace over 40 older-generation Airbus SE A321 planes with this new acquisition. 

Earlier in the year, speculations were rife about Vietnam Airlines contemplating a substantial order of Airbus A321neo jets, according to Bloomberg. 

The impending agreement bears resemblance to a 2016 pact forged during the tenure of former President Barack Obama, where Vietjet Aviation JSC entered into an $11.3 billion contract for 100 737 Maxes.

Like its counterparts in Asia, Vietnam Airlines endured a rough patch throughout the COVID-19 pandemic, with a slow-paced recovery owing to extended border closures in the region. The airline has been registering losses each quarter since the beginning of 2020, Bloomberg reported.

A Vietnam Airlines Boeing 787-9 Dreamliner aircraft. The airline is nearing a major deal with Boeing. (Patrick Becker/ullstein bild via Getty Images)

However, a slight uptick in domestic travel has facilitated a reduction in the after-tax loss to $54 million in the second quarter of this year, down from approximately $108 million in the corresponding period last year.

Despite the optimistic trajectory, the airline’s financial health remains fragile, posing a challenge in securing funds for this hefty purchase, according to the outlet. 

 

This content was partially produced with the help of AI tools and was reviewed and published by Zenger News editors.

© 2023 Zenger News.com. Zenger News does not provide investment advice. All rights reserved.

Produced in association with Benzinga

Edited by Arnab Nandy and Newsdesk Manager

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