Vietnam Airlines considers Airbus, Embraer Regional jet order

Vietnam Airlines JSC is exploring an order for about 20 Airbus SE or Embraer SA regional jets to expand domestic capacity, according to people familiar with the matter.

The Hanoi-based national carrier has been meeting aircraft manufacturers and airlines using the A220 and Embraer’s rival E2 jets as part of its deliberations, said the people, who asked not to be identified because the discussions are confidential.

The unprofitable airline is unlikely to place an order for some months, some of the people said.

Vietnam Airlines, Airbus and Embraer declined to comment.

Local media reports in June cited company executives saying the carrier’s future need for single-aisle jets would depend on the progress of upgrades to small airports in Vietnam. Last November, Vietnam Air signed a memorandum of understanding with Boeing Co. for 50 737 Max jets. 

The airline currently operates about 95 aircraft, according to FlightRadar24.

Vietnam Air’s near-term interest in Airbus and Embraer jets could be a blow to Commercial Aircraft Corp of China Ltd., considering the carrier was seen as a potential buyer of China’s domestically produced jet, the C919, which is looking for more foreign customers. 

Vietnam Air faces intense competition from challenger VietJet Aviation JSC, which has expanded its market share to be a close second, according to data from aviation data provider Cirium. Between them, they control almost 75% of Vietnam’s domestic air travel market.

Interest in expanding Vietnam Air’s fleet comes as the country’s aviation agency encourages airlines to lease more planes to meet rising demand after a number of jets were grounded due to engine recalls.

--With assistance from Nguyen Dieu Tu Uyen and Nguyen Kieu Giang.

©2024 Bloomberg L.P.