Vietjet, the Vietnamese budget airline, announced Thursday it had finalized a $300-million financing agreement with AV AirFinance – a partner investment fund KKR – to expand its fleet.
The announcement is in line with a Reuters article from the previous week that detailed the financial arrangement between Vietjet, AV AirFinance and the Deputy Premier Ho Duc Phoc during his visit to the US.
Phoc’s visit was to discuss a tariff reciprocity agreement in the face of rising tensions.
Initial reports put the value of this deal at 200 million dollars.
Vietjet said that its agreement with AV Finance was the most recent in a long line of financial deals totaling $4 billion, which it has secured with US business partners. This highlights its increasing ties with American companies.
Boeing 737 Max on the horizon: Deliveries are expected in this year
Vietjet also agreed to purchase 200 Boeing 737 MAX aircraft in a contract that was originally signed in 2016, and then revised in 2019 during Trump’s Vietnam visit. This is a major investment for the company in terms of its growth.
But no jets are yet delivered.
Boeing aircraft are a source of confidence for the airline, which stated it expects to receive the first jets in this year. It is also in talks with Boeing about possibly expanding the order.
Reuters reported on Friday, that the airline is also looking at purchasing 20 Boeing 787 wide-body jets to expand its fleet. This would enhance its ability to fly long distances.
Vietjet announced in January it has agreements with major US companies, such as Boeing, worth almost $50 billion. It is currently in negotiation for further agreements, worth about $14 billion. This shows its strong economic links with the US.
Boeing also confirmed that VietJet will receive the first 14 aircraft of 200 VietJet ordered this year.
Trade tensions, tariff negotiations and the hidden deals
VietJet and KKR did not respond to inquiries about this financing agreement, as it remains ambiguous.
Boeing referred VietJet’s comments, indicating their agreement, in media communication, according to Reuters.
According to two industry sources, VietJet (or the flag carrier Vietnam Airlines) and VietJet were in negotiations with a potential seller for more passenger aircraft.
Vietnam Airlines did not reply to any requests for comment, indicating the general lack of conversation surrounding the purchase.
A number of Vietnamese and US officials suggested that buying planes could be an effective strategy to deal with the trade concerns expressed by the Trump Administration.
Vietnam’s public voice has expressed its concern about US tariffs of 46% on goods made in Vietnam that will take effect April 9 unless Washington grants a reprieve.
According to the official portal of the Vietnamese government, the Deputy Premier Phoc will be traveling to the US on April 6. However, no meetings have been announced with US officials. Many hoped that he would bring about a resolution to US-Vietnam relationship.
Hanoi announced in the past weeks multiple concessions for avoiding US tariffs. These include cutting import duties, and promising to buy more US products. All of this signals the country’s desire to avoid tensions over trade with the US.
The original article, Vietjet gets $300M in funding to expand Boeing amid rising tariffs appeared on COINPAPER.
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