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November 17, 2007

VIETNAM : Aviation
Vietnam plans to order 12 Boeing 787s

Vietnam plans to buy 12 Boeing 787s to meet growing demand for air travel in the booming Southeast Asian country, officials said Friday.
State-owned Vietnam Airlines will purchase four of the planes and a new joint venture called Vietnam Aircraft Leasing Co. will purchase eight, company officials announced at a news conference. They expect to sign the deals soon.
Vietnam Airlines and Chicago-based Boeing Co. declined to disclose the price of their deal. VALC said in a news release it would pay $1.42 billion for its eight planes.
Many companies in the region are lining up to buy new planes, said Pham Ngoc Minh, vice president of Vietnam Airlines and chairman of VALC. "If we don't make a quick and bold move now, the delivery of the planes would have to be pushed back further," Minh said.

VALC is a consortium of five large state-owned Vietnamese companies, including Vietnam Airlines which is the biggest stakeholder with 23 percent. VALC will lease its 787s to Vietnam Airlines when the planes are delivered in 2014.
Vietnam Airlines now has 46 aircraft in its fleet. Two years ago it said it planned to have 80 planes by 2015 and 110 by 2020.
Given the rapid pace of economic growth in Vietnam, Minh said, the company may have to purchase even more aircraft.
In September, Vietnam Airlines signed a memorandum of understanding with Airbus to buy 10 A350-900 plus 20 smaller A321s.
Communist Vietnam has been implementing free-market reforms, and its economy is now among the fastest growing in the world, increasing by more than 8 percent last year. The country joined the World Trade Organization earlier this year, and foreign investment and tourism are booming.
Vietnam Airlines spokesman Trinh Ngoc Thanh said Vietnam's air transport market has grown an average of 15 percent per year in recent years.
Vietnam Airlines had already previously ordered four 787s in 2005.
To date, Boeing has won more than 700 orders for the 787, while Airbus has received 154 firm orders and 110 nonbinding commitments for the similarly sized A350, which is scheduled to enter service in 2013.

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