Vietnam Air, Boeing near $10 billion deal for 50 737 Max planes, Bloomberg reports

Vietnam Airlines will sign an initial agreement to buy about 50 Boeing 737 Max jets in a deal valued at $10 billion, Bloomberg News reported on Sunday, citing people familiar with the matter.

The report on the deal, which confirms a Reuters report last week that Boeing was planning to sell 50 of its 737 MAX to Vietnam, came during U.S. President Joe Biden’s visit to Hanoi on Sunday.

Boeing and Vietnam Airlines did not immediately respond to requests for comment.

Boeing has a deal with Vietnam Airlines’ rival VietJet for the sale of 200 of its 737 MAX planes.

Vietnam was the world’s fifth fastest-growing aviation market in 2022 when it lifted COVID-19 travel restrictions, according to the International Air Transport Association (IATA), which predicts the country will serve 150 million air transport passengers by 2035.

Boeing 737 Max jets were grounded worldwide for months after two fatal crashes in Indonesia and Ethiopia in 2018 and 2019. The planes returned to service from the end of 2020.

Vietnam Airlines recorded a net loss of 1.3 trillion dong ($53.96 million) in the second quarter of this year, its 14th quarter in the red, its financial statements showed. The carrier has said the losses were due to rising fuel prices and other financial risk factors.

Boeing has also been in talks with Vietnamese authorities, together with other U.S. defense companies, for the possible sale of military equipment, including drones and helicopters.

Arlington, Virginia based Boeing has six suppliers in Vietnam and is working to increase their capabilities.