Vietnamese budget airline Vietjet announced on Thursday that it has finalized a $300 million financing agreement with AV AirFinance, a partner of investment fund KKR, to support the expansion of its aircraft fleet.
This announcement confirms a Reuters report from last week, which detailed the financing arrangement between Vietjet and AV AirFinance during a visit to the US by Deputy Prime Minister Ho Duc Phoc.
Phoc’s visit aimed to negotiate a reciprocal tariff agreement amid rising trade tensions.
The initial report pegged the deal’s value at $200 million.
Vietjet’s agreement with AV AirFinance is the latest in a series of financing deals worth a cumulative $4 billion that have been secured with US partners, the airline said in its statement, underscoring its growing ties with American businesses.
Boeing 737 MAX on the horizon, deliveries expected this year
Vietjet has also committed to purchasing 200 Boeing 737 MAX jets in a deal that was initially signed in 2016 and subsequently revised during Trump’s visit to Vietnam in 2019, marking a significant investment in its future growth.
However, no jets have been delivered yet.
The airline stated that it anticipates receiving the first deliveries of these jets this year and is currently in discussions to potentially expand the order, signaling its confidence in Boeing’s aircraft.
Reuters reported last Friday that the airline was also considering the purchase of 20 wide-body Boeing 787 jets, further expanding its fleet and bolstering its long-haul capabilities.
Vietjet stated in January that it had agreements worth nearly $50 billion with leading US corporations, including Boeing, and was in negotiations for additional agreements worth approximately $14 billion, underlining its deep economic ties with the US economy.
It also said Boeing will deliver this year the first 14 of the 200 aircraft VietJet has already ordered.
Behind the deals: trade tensions and tariff negotiations
VietJet, KKR, its partner and Vietnam’s foreign affairs ministry did not reply to requests for comments about the financing deal, which remains ambiguous.
Boeing deferred comments to VietJet, showing their agreement in media communications, as per Reuters.
Two industry sources told the publication that VietJet and flag carrier Vietnam Airlines (HVN.HM) were in talks to buy more passenger jets, without elaborating on the possible seller.
Vietnam Airlines also did not respond to requests for comments, showing the overall quiet nature of the conversations surrounding this purchase.
Multiple Vietnamese and US officials have suggested that the purchase of planes by Vietnamese companies could be a strategic move to address trade concerns raised by the Trump administration.
Vietnam has publicly voiced its concerns about the US’s 46% tariffs on Vietnam-made goods that are scheduled to take effect on April 9, unless the country secures a reprieve from Washington.
Deputy Prime Minister Phoc is set to travel to the US from April 6, according to the government portal, which did not announce any meetings with US officials, despite many hoping he could bring a solution to US-Vietnam relations.
Hanoi has announced over the last weeks multiple concessions to avoid US tariffs, including cutting import duties and pledging to purchase more US goods, all signaling the nation’s eagerness to avoid trade tensions with the US.
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