VietJet may buy 787s or A350s as airline weighs US route

Bloomberg

VietJet Aviation JSC plans to expand its fleet to include wide-body jets as the Vietnamese low-cost carrier considers California as its first US destination starting about 2019.
Vietnam’s biggest private airline would use the larger aircraft to begin the route after the US Federal Aviation Administration grants Vietnam airlines permission to fly to America, said Nguyen Thi Phuong Thao, VietJet’s founder and chief executive officer. The first flights could link the Southeast Asian nation with the Norman Y. Mineta San Jose International Airport, located near a large Vietnamese community, and would also be close enough to serve San Francisco, she said.
“We aim to expand international flights in the next few years” Thao said. “We want to make international flights 60 percent of our total flights. We are also studying the possibility of using widebody planes for long-haul flights when market conditions are favourable.”
VietJet is expanding rapidly as it goes head on with Vietnam Airlines Corp for a larger slice of an air-passenger market that the International Air Transport Association (IATA) estimates will be among the world’s five fastest-growing in the next 20 years. Vietnam Air CEO Duong Tri Thanh said the state-controlled carrier is considering a route to Los Angeles by late 2019 or early 2020. VietJet—which currently operates only single-aisle planes—on Sunday signed a $600 million deal to acquire Pratt & Whitney engines to outfit 10 narrowbody jets during a ceremony with US President Donald Trump in Hanoi.
Trump visited the nation’s capital after attending the APEC leaders’ meeting in Danang.
The latest deal is separate from a $3.6 billion contract signed earlier this year for 215 engines.
The budget airline’s international capacity has soared by more than 150 percent in the past year, said Brendan Sobie, a Singapore-based analyst at CAPA Centre for Aviation.
“The domestic market has had this great growth in the last five years, tripling in size, but there is a limit to that,” he said.
“A lot of these people who have become first-time fliers in the last five years will be able to travel overseas as they build discretionary income.”
The carrier has ordered 230 Airbus SE and Boeing aircraft since 2014. VietJet and national carrier Vietnam Airlines each had a 42 percent share of the domestic aviation market last year, though VietJet’s 2017 share is probably less as it focusses on overseas expansion, Sobie said.
Last year, the budget carrier ordered 100 Boeing 737 Max 200 aircraft with a list price of
$11.3 billion. It agreed to buy 30 A320neos valued at $3.6 billion in 2015, adding to an order for as many as 100 Airbus planes a year earlier. VietJet, which began operations in December of 2011, expects to serve 17 million passengers this year.