Vietnam's VietJet agrees bumper $9 bln Airbus order

Reuters

* VietJet deal covers 92 jets, 62 are firm orders

* Aims for 2015 IPO in Hong Kong or Singapore - MD

* In JV talks with a Myanmar airline

* Deal is latest big order from Asia budget carriers

By Nguyen Phuong Linh

PARIS/HANOI, Sept 25 (Reuters) - Low-cost airline VietJetagreed a provisional order for up to 92 Airbus jetsworth $9 billion at list prices on Wednesday, stepping upexpansion to make its mark in a fast-growing regional market.

Vietnam's first privately-owned airline said it would buymostly A320 planes, financed by a planned stock market listingas well as loans from foreign banks backed by export credits.

The deal is the latest blockbuster order from Asia's budgetcarriers for Airbus or Boeing jets, as a huge surge inthe number of middle-class travellers with disposable incomespushes up industry traffic forecasts.

Wednesday's announcement in Paris confirmed a Reuters reporton Tuesday.

Of the 92 jets, 62 are set to become firm orders withpurchase rights - or options with undefined delivery dates - fora further 30. The airline plans to lease eight more planes.

The carrier aims for a stock market listing in either HongKong or Singapore in 2015 to fund expansion beyond Vietnam,managing director Luu Duc Khanh said.

"This deal is a milestone in our company, it means we areaiming to be a multinational budget airline," Khanh said in atelephone interview.

"Vietjet Air's purpose is expanding to the regional market,not only in the domestic market, so we need to be in theoverseas market in order to call in more capital."

Vietjet, which has been flying since December 2011, has afleet of nine jets including the country's first equipped withupward-slanting, fuel-saving "Sharklet" wingtips which itreceived in France on Tuesday. A tenth plane is due next week.

It is the only private airline in Vietnam that offersdomestic and international flights. At present, its onlyoverseas destination is Thailand's Bangkok.

BIG AMBITIONS

The plane order was part of an economic package signed during a visit to Paris by Vietnamese Prime Minister Nguyen TanDung, but only materialised after lengthy negotiations.

"We negotiated most of the night," Khanh, a former banker,told reporters.

When formalised, the deal will include firm orders for 42A320neo, a fuel-saving version of Airbus's best-selling jet, aswell as 14 current-generation A320s and six A321 aircraft.

The first two aircraft will be delivered in the last quarterof 2014 followed by five to 10 jets each year until 2022.

Airline industry experts say VietJet wants to follow thepath of low-cost giants AirAsia of Malaysia and LionAir of Indonesia, which have signed record plane orders.

Shares in Airbus parent EADS rose as much as 1.2percent against a weaker European market following the VietJetdeal, boosted also by $6 billion of orders in China where Airbuslaunched a new type of A330 tailor-made for regional growth.

Vietnam's national carrier Vietnam Airlines has also expressed interest in A380 superjumbos, industry sources said.

VietJet is talking to an airline in Myanmar about a possiblejoint venture similar to its agreement in June with Thailand'sKanAir to form Thai VietJet Air early next year, Khanh said.

He would not say which of Myanmar's seven airlines the firmwas looking to partner with.

Speaking to reporters in Paris, Khanh said VietJet was alsointerested in setting up the first low-cost services betweenVietnam and North Asia including Taiwan - which has 100,000Vietnamese residents - South Korea and Japan.

He said the airline would pursue a strategy of alliances tosupport its international growth and open up new markets.

Khanh said VietJet, owned in part by Sovico Holdings, hadturned a profit in the first seven months of this year.

He said the airline, which was recently fined for organisingan in-flight bikini contest, would continue to foster a "fun"brand combined with low prices and customer service. But he alsopledged to maintain some of the industry's lowest unit costs.

"My background is in figures and numbers. I know that 1percent here, 0.1 percent there, make a difference," he said.

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