Vietnam Airlines signs funding deal with Vietcombank for 50 narrow-body planes

[HANOI] Flag-carrier Vietnam Airlines said on Thursday (Apr 24) it had signed a memorandum of understanding with the country’s top lender Vietcombank for funding to purchase 50 narrow-body planes.

The plane purchases are part of Vietnam Airlines’ fleet development strategy for the next decade, it said.

“The investment is aimed at expanding the short and medium-haul network in key markets such as South-east Asia, Northeast Asia and domestic markets, where demand for transportation is growing rapidly and competition is increasingly fierce,” Vietnam Airlines said.

It did not specify which planes it would purchase nor the funding size.

Vietcombank had earlier arranged funding for Vietnam Airlines to purchase wide-body planes such as Airbus A350, Boeing 787 and narrow-body Airbus A321 planes, according to the statement.

The funding deal comes after Vietnamese and US officials have said repeatedly that purchases of US planes would be crucial to reduce Vietnam’s large trade surplus with the United States, which the Trump administration has said was a key factor in “reciprocal” tariffs of 46 per cent initially imposed on the country.

Boeing has, however, struggled to deliver planes to Vietnam and other countries.

Earlier in April, Vietnam Airlines announced a separate non-binding deal with Citibank worth more than US$560 million aimed at “strengthening the airline’s operational capacity and expanding its international route network in the years ahead”.

Embraer, the Brazilian planemaker is in talks for the possible sale of 10 E190 narrow-body jets to Vietnam Airlines, one Brazilian official said last month. REUTERS