By Jeff Mason and Khanh Vu
HANOI (Reuters) – Vietnamese carriers VietJet and Bamboo Airways formally announced on Wednesday deals with Boeing (NYSE:) Co to buy 110 planes worth more than $15 billion as the fast-growing companies look to expand their operations in Asia and beyond.
On the sidelines of a summit between U.S. President Donald Trump and North Korean leader Kim Jong Un in the Vietnamese capital of Hanoi, VietJet showcased a recent order to purchase 100 737 MAX planes worth $12.7 billion. The deal was provisionally announced in July 2018 and firmed up later that year, without a public announcement until now.
Boeing said the VietJet purchase, which was previously on its order books as an unidentified order, took the Vietnamese carrier’s MAX orders to 200 jets and included 80 of its latest 737 MAX 10 model.
VietJet CEO Nguyen Thi Phuong Thao told Reuters the first four aircraft ordered as part of a previous 100-plane deal, announced in 2016 when President Barack Obama visited Vietnam, would be delivered later this year.
Bamboo announced a firm deal with Boeing to purchase 10 wide-bodied 787 planes worth $2.9 billion. Boeing said this deal too was already on its order book as an undisclosed customer.
Bamboo, owned by property and leisure company FLC Group, is also in talks to buy 25 narrow-bodied Boeing 737 planes, Chairman Trinh Van Quyet told Reuters.
Bamboo, which made its first flights in January, had placed a provisional order last year for 20 Boeing 787 widebody jets worth $5.6 billion at list prices, and Wednesday’s deal is not part of that.
“The purchases are part of our strategy to expand our operations on the international market, including flying to the United States and Europe,” Quyet said.
Bamboo plans to launch its first international flights in second quarter this year, with initial destinations in Japan, South Korea, Thailand and Singapore, he added, ahead of non-stop flights to the United States late this year or early next.
Earlier this month, the U.S. Federal Aviation Administration declared Vietnam complied with international aviation standards, allowing Vietnamese carriers to fly to the United States for the first time and codeshare with U.S. airlines.
VietJet also finalised a $5.3 billion long-term engine support agreement with General Electric (NYSE:) for the LEAP-1B engines in its fleet.
The White House put the total value of the deals at more than $21 billion.
“These deals will support more than 83,000 American jobs and provide increased safety and reliability for Vietnamese International travelers,” a senior White House official said.
Trump and Kim Jong Un meet in Hanoi on Wednesday for their second summit, with Trump holding out Vietnam as a model of economic success that isolated North Korea could follow.
Trump hailed the Boeing deals at a lunch with Vietnamese officials.
“We appreciate very much that you’re reducing the trade deficit with the United States, which was very substantial before I got here, and now where we’re bringing it down with great orders like the orders that you made today,” Trump said.
Vietnam ran a trade surplus of $34.8 billion with the United States last year, widening from a surplus of $32.2 billion a year earlier, according to Vietnamese customs data.