According to a person familiar with the matter, Vietnam Airlines is set to sign a preliminary agreement to purchase approximately 50 Boeing 737 Max jets worth an estimated $7.5 billion. This confirms a report by Reuters from last week. U.S. President Joe Biden's visit to Hanoi to strengthen ties with Vietnam coincides with this announcement.
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At the moment, neither Boeing nor Vietnam Airlines have commented on the matter. Although this deal would cost up to $7 billion at list prices, the person familiar with the situation did not disclose whether bulk discounts would be applied. VietJet, Vietnam Airlines' competitor, has already agreed to purchase 200 of Boeing's 737 MAX planes.
In 2022, Vietnam was the world's fifth-fastest-growing aviation market after lifting COVID-19 travel restrictions, with the International Air Transport Association (IATA) predicting that by 2035, the country will serve 150 million air transport passengers. The Boeing 737 Max jets were grounded worldwide for several months after two fatal crashes in Indonesia and Ethiopia in 2018 and 2019. The planes resumed service at the end of 2020.
Vietnam Airlines suffered a net loss of 1.3 trillion dong ($53.96 million) in Q2 2021, marking its 14th consecutive quarter in the red. The airline attributed these losses to increasing fuel prices and other financial risks. Boeing has also discussed the potential sale of military equipment, including drones and helicopters, with Vietnamese authorities and other U.S. defense firms. Boeing, based in Arlington, Virginia, currently has six suppliers in Vietnam and is seeking to enhance their capabilities.