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VietNamNews

Aircraft firm signs $184m engine deal

Update: December, 07/2010 - 10:33

HA NOI — Viet Nam Aircraft Leasing Company (VALC) yesterday signed an agreement with International Aero Engines AG (IAE) to purchase 20 V2500 engines to power 10 new Airbus A321-200 aircraft.

The engine contract is valued at more than US$184 million with deliveries being made from July 2012 to 2013. The engine is designed to provide an additional one per cent fuel burn advantage, along with a corresponding reduction in CO2 emissions. It also improves time-on-wing by up to 20 per cent.

VALC's president and CEO Tran Long told Viet Nam News that the total investment for the purchase of the 10 aircrafts and 20 engines was more than $700 million and the project is expected to fetch a profit equalling 12-15 per cent of its equity.

The new aircraft will be operated by Vietnam Airlines (VNA). VALC has leased VNA four out of five ATR72-500 aircraft as planned. The last aircraft will be delivered late this month. The monthly lease for each is over $200,000, which is fixed for 11 years and 11 months.

Since its establishment in 2007, VALC, founded by state-owned Bank for Development and Investment of Viet Nam (BIDV) and the national flag carrier Vietnam Airlines (VNA) in 2007 pursuant to the Prime Minister's instructions, has just signed a contract with Vietnam Airlines even though Viet Nam has four other airlines.

"We target both domestic and regional markets. However, in Viet Nam, excluding Vietnam Airlines, other airlines are still weak and small. I think we may have to wait at least to 2014 to expand," Long said. — VNS

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