Government Greenlights Fleet Expansion Plan
Vietnam Airlines has received in-principle approval from the government to purchase 50 narrow-body aircraft, marking a significant step in its fleet modernization strategy. Notably, this deal will not require a state guarantee, allowing the airline to streamline its acquisition process.
The government’s approval, conveyed through an official dispatch from Deputy Prime Minister Ho Duc Phoc, aims to meet surging consumer demand for air travel and to replace aging aircraft in the current fleet. Vietnam Airlines plans to acquire 50 new Airbus A320 NEO and Boeing 737 MAX jets, along with 10 spare engines, for an estimated total of approximately $3.7 billion—an investment that is 1.6 times the airline’s current asset value based on its 2024 financial data.
This acquisition is part of Vietnam Airlines’ broader strategy to phase out older A321 CEO planes. The new aircraft will enhance the efficiency and reliability of the fleet, aligning with increasing passenger expectations and operational standards. Earlier in September 2023, the airline also announced a deal for an additional 50 Boeing 737 MAX aircraft, with deliveries expected between 2027 and 2030.
To support this growth initiative, Vietnam Airlines signed a memorandum of understanding with Citibank earlier this month for $560 million in funding focused on strategic projects, including the aircraft purchase. Furthermore, the airline has partnered with Vietcombank to secure additional financial resources for the acquisition.
Looking ahead, Vietnam Airlines forecasts the need for a fleet of 52 wide-body and 112 narrow-body aircraft by 2035. Currently, the airline operates approximately 100 aircraft, including over 30 wide-body jets, showcasing its commitment to expanding its capacity to meet the demands of the growing travel market.
In its 2024 financial report, Vietnam Airlines reported impressive figures, including over VND 113.7 trillion (approximately $4.37 billion) in revenue, transporting 22.7 million passengers and 314,700 tons of cargo, with an average aircraft utilization of 11 hours per day—reflecting a 25% increase from the previous year.
Vietnam Airlines’ strategic acquisition of narrow-body aircraft is poised to enhance its operational capabilities and address the evolving travel landscape in Vietnam. As the airline expands its presence and modernizes its fleet, the implications for the retail sector may be significant, driving increased consumer activity and enhancing travel options for millions. This move signifies not only a response to market demands but also a commitment to sustained growth in the competitive aviation industry.
