VietNamNet Bridge - VietJet Air and TienPhong Bank yesterday signed a US$21 million financing agreement in HCM City providing for the purchase of two Airbus A320.

The signing ceremony.

Tien Phong Bank has become the first local bank to ink a financial agreement with low-cost carrier VietJet. With this deal, Airbus will deliver the next two Airbus A320 aircraft to VietJet in November and December this year, enabling the new-age carrier to advance its expansion plan.

The two Airbus A320 are part of a larger order to acquire 100 aircraft, which was signed between VietJet and Airbus in 2013. Tien Phong will also supply the low-cost carrier with more loans to finance its future sale leaseback agreements.

VietJet previously signed finance agreements with GECAS (USA), BNP Paribas (France), Jackson Square (Japan), and other banks as part of aircraft sale-leaseback deals. All of these financial agreements are in the process of moving forward.

Sale-leaseback agreements are attractive to both local and international banks due to the reliable international nature of deals and guaranteed global value of aircraft.

However, the aviation industry is a niche market even for the world’s leading financial institutions. To enter the fray, banks must be equipped with the expertise in not only finance but also aviation. These banks must be able to perform global transactions widely accepted by aircraft manufacturers and finance institutions.

In related news, VietJet has just welcomed the latest addition to its fleet: a brand new Airbus A320 Sharklet, which traveled from the Airbus base in Toulouse, France to Tan Son Nhat International Airport in Ho Chi Minh City. The aircraft is numbered VNA-696. The airline now boasts a fleet of 16 Airbus jets and operates a network of 27 domestic and international routes.

PV