Thursday, 7 March 2019

VietJet Air finalises $5.3 billion CFM LEAP-1B engine order and long-term support agreement

Vietnam’s VietJet Air and CFM International have finalized an agreement for the airline to purchase 200 LEAP-1B engines to power 100 additional Boeing 737 MAX aeroplanes announced earlier today, along with an extension of airline’s current Rate Per Flight Hour (RPFH) agreement to include the new engines.  The agreement, which includes 15 spare engines, is valued at $5.3 billion U.S.

The signature ceremony was witnessed by U.S. President Donald Trump and Vietnam party chief and President Nguyen Phu Trong in Hanoi, Vietnam, on February 27.

RPFH agreements are part of CFM’s portfolio of flexible aftermarket support offerings.  Throughout the term of the 12-year agreement, CFM guarantees maintenance costs for the 415 VietJet Air’s LEAP-1B engines on a dollar per engine flight hour basis.

Based in Ho Chi Minh City, Vietjet has been a CFM customer since it commenced operations in late 2011 with the CFM56 engine and currently operates a fleet of 65 CFM-powered aircraft.
“We have been very happy with our CFM56 fleet and look forward to introducing the new LEAP-1B engine later this year,” said Madame Thao Nguyen Thi Phuong Thao, CEO of VietJet Air.  “This RPFH agreement will be an important element in keeping our operating costs predictable, which puts us in a much better position to plan our operations and implement our growth strategy.”
“The LEAP-1B has been doing extremely well in commercial service in the last nearly two years and we believe the engine will prove to be an important asset for VietJet Air over the long term,” said Gaël Méheust, president and CEO of CFM International.   “We certainly appreciate the high level of confidence this agreement shows in CFM and we look forward to further strengthening this very special relationship in the years to come.”
VietJet currently boasts a fleet of more than 65 aircraft, including A320s and A321s, and operates more than 200 flights each day. It has opened more than 40 routes in Vietnam and across the region to international destinations such as Thailand, Singapore, South Korea, Taiwan, China and Myanmar.