Thursday, November 01, 2007

Vietnam goes on aircraft buying spree

Prime Minister Nguyen Tan Dung last week returned from the United States and France with news of a massive boost for Vietnam Airlines.

Vietnam Airlines’ rapid expansion mirrors the economy’s spectacular growth
Dung witnessed the national carrier to commit to buying 12 Boeing B787s worth $1.8 billion while in New York and 10 Airbus A350s and 20 Airbus A321s, with a $3.7 billion price tag, while in France.
Nguyen Sy Hung, Vietnam Airlines chairman and CEO, said the first Boeing B787 would be delivered by 2015, the first A350 by 2014 and the first A321 by 2012. The airline hopes to increase its fleet to 86 planes by 2015 and 110 by 2020.
“The new deals are an effort to modernise the fleet in order to reduce costs and improve the quality of services, laying the foundation for expanding our flight network and enhancing our competitiveness in domestic and international markets,” said Hung.
Although the aviation pact was the largest to be signed during the French trip, there were other key deals struck with the country’s former colonial ruler.
Vietnam signed close to $6 billion in other agreements, including the deal between the Vietnam Garment and Textile Corporation (Vinatex), the Tin Nghia company and the BNP Paribas to issue Vinatex bonds worth $500 million. An additional $500 million contract between the Bank of Agriculture and Rural Development and Merrill Lynch to aid Vietnamese coffee growers as well as a $250 million offer sheet between Alstom and Vietnamese partners to supply equipment for the Son La hydro electricity project were also forged during the meetings.
At the Vietnam - France Business Forum in Paris, the prime minister said that Vietnam was a potentially huge market with an abundant and cheap workforce farmed in an environment of political and social stability. In addition, the Vietnamese Government is doing its best to accelerate administrative reforms in order to create a clear, transparent and favourable investment environment for foreign investors.
Dung reiterated that French businesses would find Vietnam a good destination for their investment as there was a large French-speaking community in the country.
During his meeting with French Prime Minister Francois Fillon, Dung also expressed his hope that French investors would increase their business interests in Vietnam, especially in the areas of transport infrastructure, energy, information technology and space aviation.
For his part, Fillon said that Vietnam was a destination marked for success and that France would need to introduce measures to increase its investment and trade relations with the country.
“In the near future, we will send many business missions to Vietnam in order to boost bilateral investment and economic ties,” said Fillon. He also said the agreements and contracts that had been signed by the two governments and the two business communities were only the beginning of many important economic activities that will run in the future.
Herve Bolot, French ambassador to Vietnam, said that Dung’s visit to France was one more affirmation of the close partnership between the two countries.
“France has been one of the leading foreign investors in Vietnam for a long time. There are several big French investment projects which are waiting for Vietnam’s approval,” said Bolot. He also said that French investment would increase in the sectors of energy, telecommunication, health care and tourism.