Vietnam Airlines to finalise 50 Boeing narrow-body order soon, sources say

HANOI (Reuters) - Flag carrier Vietnam Airlines <HVN.HM> is close to finalising a provisional order for 50 Boeing 737 MAX jets that it made in 2023, industry sources said, as it signed a funding arrangement for 50 single-aisle planes on Thursday.

The airline said it had signed a memorandum of understanding with the country's top lender Vietcombank for funding to purchase 50 narrow-body planes, without naming the manufacturer.  

Vietnam Airlines signed an initial agreement with U.S. planemaker Boeing in 2023 for 50 of the firm's single-aisle 737 MAX aircraft.

Vietnamese and U.S. officials have said repeatedly that purchases of U.S. planes would be crucial to reduce Vietnam's large trade surplus with the United States, which the Trump administration has said was a key factor in the 46% tariffs it initially imposed on the country.

The carrier, which operates a mixed fleet of Boeing and Airbus aircraft, did not specify which planes it would purchase, nor the amount of funding it had agreed with Vietcombank.

Boeing and Airbus referred Reuters enquiries to Vietnam Airlines.

Vietnam Airlines' said the purchase was part of its fleet development strategy for the next decade.

"The investment is aimed at expanding the short and medium-haul network in key markets such as Southeast Asia, Northeast Asia and domestic markets, where demand for transportation is growing rapidly and competition is increasingly fierce," the carrier said.

Vietcombank has previously arranged funding for Vietnam Airlines to purchase wide-body planes, such as the Airbus A350 and Boeing 787, as well as the narrow-body Airbus A321, the statement said.

Boeing has been struggling to deliver aircraft to Vietnam and other countries on schedule due to a production slowdown and global supply chain bottlenecks.

However, Boeing on Wednesday said it potentially had dozens of planes available for new customers because Chinese airlines were refusing to take delivery of them as a result of Beijing's heavy retaliatory tariffs against U.S.-made goods.

Earlier in April, Vietnam Airlines announced a separate non-binding deal with Citibank worth more than $560 million aimed at "strengthening the airline's operational capacity and expanding its international route network in the years ahead". 

Embraer, the Brazilian planemaker is in talks for the possible sale of 10 E190 narrow-body jets to Vietnam Airlines, one Brazilian official told Reuters last month.

(Reporting by Khanh Vu and Tim Hepher; Additional reporting by Francesco Guarascio and Lisa Barrington; Editing by Martin Petty and Kate Mayberry)