Boeing Inks Major Deals at Trump-Kim Summit

The U.S.-North Korea Summit in Hanoi saw a flurry of commercial aircraft orders on Wednesday as two Vietnamese carriers finalized deals with Boeing to buy a total of 110 airplanes worth an estimated $15.7 billion at list prices.

Low-cost carrier (LCC) Vietjet firmed commitments to purchase 100 Boeing 737 Max narrowbodies worth $12.7 billion, while newly launched Bamboo Airways agreed to buy ten 787-9 Dreamliners valued at $3 billion. The parties sealed the agreements during signing ceremonies in Hanoi witnessed by U.S. President Donald Trump and Vietnamese President Nguyen Phu Trong.

Vietjet’s 100-airplane purchase, unveiled at the Farnborough Airshow last year, includes 20 Max 8s and 80 of the latest 737 Max 10 variant. The deal bumps the airline’s Max orders to 200 jets, after Vietjet inked an agreement for 100 high-density Max 8 jets in 2016. The carrier now holds the distinction as the largest Asian customer of the Max 10.

In addition to aircraft purchases, Boeing will cooperate with Vietjet to “enhance technical and engineering expertise, train pilots and technicians, and improve management capabilities,” the airline said in a statement. Vietjet also inked a $5.3 billion long-term engine-support agreement with General Electric to equip its fleet with Leap-1B engines. According to Vietjet, the value of the deals totals $18 billion.

Meanwhile, Bamboo’s purchase followed a provisional order made in June 2018 for 20 Boeing 787s for $5.6 billion at list prices. The airline’s 10-airplane commitment on Wednesday was not part of last year’s deal. In a press release, Bamboo said the airline will operate 30 Dreamliners, the first of which it expects to arrive in the third quarter of 2020. The airline also disclosed it is considering buying twenty-five 737 Max jets and would enter discussions with Boeing.

The recent orders follow the U.S. Federal Aviation Administration’s decision earlier this month to award Vietnam a Category 1 safety rating, effectively allowing Vietnamese airlines to launch routes to the U.S. and participate in codeshare agreements with U.S.-based carriers. While Bamboo plans to leverage its recent purchases in “key” markets in the Asia-Pacific region (Thailand, Singapore, Taiwan, China, and Australia), England, and France in the second quarter of this year, the airline also has plans to launch service to the U.S. in late 2019 or early 2020. In preparation, the airline has established a representative’s office in the U.S.

Vietnam’s largest private carrier, Vietjet also wants to expand its international flight network and plans to fly to U.S. cities with large Vietnamese communities. The LCC has captured 45 percent of the local market and flies to destinations such as China, Hong Kong, Taiwan, South Korea, Myanmar, Thailand, and Cambodia.