An Airbus A380 is taking part in a flying display during the 52nd Paris Air Show at Le Bourget Airport near Paris, France June 23, 2017 - REUTERS/Pascal Rossignol
HONG KONG - 1 November 2018: Fast-growing budget carrier Vietjet Aviation is set to finalize a $6.5 billion jet order with Europe’s Airbus during a visit to Hanoi by French Prime Minister Edouard Philippe on Friday, people familiar with the matter said.
The order for 50 A321neo jets is part of an aggressive investment in the Vietnamese airline’s fleet that has provided lucrative business for both Airbus and its U.S. rival Boeing.
It is also a boost for Airbus as it seeks to turn a raft of provisional orders put together at July’s Farnborough Airshow into hard revenues, narrowing a gap against Boeing this year.
The deal is the biggest economic component of an official visit to France’s former colony by Philippe from Nov. 2-4, during which he will oversee deals with French firms and hold talks with Vietnamese counterpart Nguyen Xuan Phuc, they said.
Airbus and Vietjet both declined to comment.
Vietnam and France also signed an agreement in September to expand defense collaboration, although details are scant.
VietJet CEO Nguyen Thi Phuong Thao told Reuters this week that Vietjet plans to maintain an average fleet age of just three years to keep fuel and maintenance costs low.
It placed provisional orders for the A321neo jets and 100 Boeing 737 MAX jets at the Farnborough Airshow and has been negotiating to firm them up, with deliveries expected between 2020 and 2025.
The latest deal will help to dispel doubts over the substance of deals announced in Farnborough, which was marked by a rash of vague or incomplete announcements.
However, aircraft finance industry sources have expressed doubts over whether all the planes ordered by Vietjet will be delivered on schedule amid a glut of airplane orders in Asia.
Vietnam’s expansion has also been peppered with trade sensitivities as Vietjet juggled Airbus and Boeing procurements, a strategy also designed to win bigger discounts.
Two years ago, Boeing upstaged Airbus by clinching a bumper order for 100 737 MAX jets during a visit by then-U.S. President Barack Obama. Until then, VietJet had only bought from Airbus, including a similar order for 92 jets in 2013.
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