FLC places US$3-billion Airbus purchase
FLC Group has reached an agreement with Airbus to purchase 24 Airbus A321neo aircrafts for its Bamboo Airways for US$3 billion, according to the group`s announcement on March 6.
"After studying and carefully scrutinizing the options, FLC Group and Bamboo Airways have decided to order 24 aircrafts from Airbus in the airways' first development phase that will last until 2025," FLC chairman Trinh Van Quyet said in the statement on FLC Group's website after meeting with Airbus representatives.
FLC Group and Bamboo Airways have decided to order 24 aircrafts from Airbus.
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FLC expects to buy another 24 Airbus A321 LR (long-range) planes after the Vietnamese firm obtains an airline license from the government, taking the total number of airplanes to 48, according to the statement.
Currently, the order exceeds Airbus' production capacity, said Jean Francois Laval, Senior Vice President for Sales, Asia at the meeting. However, Airbus is committed to hand over the aircrafts to Bamboo Airways in the agreed timeline in period 2022-2025.
The A321neo is the latest model of Airbus' A320 family (including A318, A319, A320, and A321). A321neo has an overall length of 44.51m with 220 seats, providing fuel burn improvement in excess of 20% per seat. For this new model, Airbus expanded seating capacity to optimize cabin space and increased exit limits.
The A321neo is considered an ideal model for hybrid low-cost and traditional airlines, the very business model Bamboo Airways is targeting.
Airbus also proposed providing assistance to FLC Group to accelerate the process of issuing the airline license for Bamboo Airways, said Laval at the meeting.
Viet Bamboo Airlines, the subsidiary of FLC Group operating Bamboo Airways, was established in 2017 with the charter capital of VND700 billion (US$30.8 million). FLC Group's main business lines are housing, resorts, and golfing.
Bamboo Airways plans to provide direct international flights to destinations where FLC Group has resorts facilities, such as Quy Nhon, Quang Ninh, Hai Phong, Phu Quoc, and Nha Trang, in addition to domestic flights connecting tourist spots in Vietnam.
Vietnam currently has four airlines, including national carrier Vietnam Airlines, budget operator Jetstar Pacific Airlines (partly owned by Vietnam Airlines), budget carrier Vietjet Aviation, and Vietnam Air Services (VASCO).
In 2010-2016, the Vietnamese air transportation market has witnessed a high average growth rate of 14.9% in passenger volume and 10.7% in cargo, informed Vietnam Civil Aviation Administration.
During the first 9 months of 2017, Vietnamese airports have served more than 71.75 million passengers, up 17.9%, and handled 833,000 tons of cargo, up 34.6% compared to the corresponding period in 2016.
A recent World Tourism & Travel Council report showed the tourism industry's contribution to Vietnam's gross domestic product will increase by nearly 90% to $34.6 billion in 2027 from the $18.4 billion recorded last year.
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