March 27, 2018 / 11:49 AM / in 6 months

Vietjet signs $7.3 billion deal with French firms for planes and engines

HANOI (Reuters) - Vietnam’s Vietjet Aviation VJC.HM on Tuesday signed deals worth a combined $7.3 billion with Safran-CFM (SAF.PA) and GE Capital Aviation Services (GECAS) France to lease and purchase planes and engines and supply maintenance services.

A VietJet aircraft is seen at Noi Bai International airport in Hanoi, Vietnam January 12, 2018. REUTERS/Kham

The budget airline signed a $6.5 billion memorandum of understanding for engine purchase and maintenance services with Safran-CFM and a $800 million contract with GECAS France for buying and leasing six Airbus (AIR.PA) A321neo planes, Vietjet said in a statement.

Vietjet is among Vietnam’s biggest and fastest-growing airlines. Its 2017 pre-tax profit is estimated to have surged 75.9 percent annually.

“This agreement recognizes the strategic partnership between Vietjet and Safran - CFM,” Vietjet’s vice general director Dinh Viet Phuong said in a statement.

The deals were signed during Vietnamese general secretary Nguyen Phu Trong’s visit to France.

The statement said Safran-CFM will provide 321 engines for Vietjet and offer maintenance and technical service, training, research, and management for the Vietnamese airline.

The airline operates 56 Airbus planes and conducts 385 flights daily within Vietnam and overseas, with dozens more planes in the pipeline with both Airbus and Boeing.

This month Vietjet signed a memorandum of understanding worth $609 million with Investec Bank PLC (IM21.L) to finance the purchase of five Airbus A321 aircraft.

Reporting by Mai Nguyen; Editing by Matthew Mpoke Bigg

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