Vietjet inks financing agreements for fleet expansion worth US$1.2billion in Japan
KUALA LUMPUR: New-age carrier Vietjet on Wednesday signed and exchanged an aircraft financing agreement in Tokyo with Mitsubishi UFJ Lease & Finance Company Limited (MUL) - a member of Japan’s leading finance group Mitsubishi UFJ Financial Group (MUFG), and France-based banking group BNP Paribas.
The signing ceremony was witnessed by Vietnam Prime Minister Nguyen Xuan Phuc and several high-ranking Japanese and Vietnamese dignitaries. The agreement paves the way for MUL and BNP Paribas to finance Vietjet’s acquisition of up to five brand new aircraft, worth US$614 million, according to the manufacturer’s listed price.
Additionally, Vietjet also signed a Memorandum of Understanding valued at US$625 million according to the manufacturer’s listed price with France-based banking group Natixis and some Japanese equity underwriters to facilitate the financing for five additional aircraft.
These deals were made under a financing plan for Vietjet’s future ownership of the aircraft.
The acquisition of these aircraft is part of a new-and-modern aircraft contract signed earlier between Vietjet and Airbus, including A321neo aircraft, which incorporates the latest in engine design, advanced aerodynamics and cabin innovations.
According to the aircraft manufacturer, A321neo engines offer a significant reduction in fuel consumption - at least 16 percent from day one and 20 per cent by 2020 - as well 75 per cent reduction in noise and 50 per cent in emissions.
All aircraft financed today will be delivered to Vietjet in the last quarter of 2018 or early 2019.
Speaking at the signing ceremony, Vietjet’s vice president Dinh Viet Phuong said, “The critical financing agreements signed today once again confirms the confidence of leading Japanese financiers in Vietjet as the airline prepares to launch new routes to Japan soon.
“Also, these deals will greatly contribute to Vietjet’s plan for fleet expansion and network growth in the coming time, thus helping to better connect Japan and Vietnam.
“We are proud to have leading and renowned financing partners accompany us on the airline’s growth path. Together we are all fully committed to bring greater added values to the community.”
Under the terms of the agreement, Vietjet and all financing partners will also work together to share best practices for the operation and management of the airline, boosting effectiveness and encouraging sustainable growth.
Vietjet currently operates the latest generation narrow body aircraft fleet, which has helped the airline achieve an impressive operation performance rating of 99.66 per cent for technical reliability.
The airline’s flight safety performance and ground operation indicators are also amongst the top in the region while operating costs are among the lowest in the world.
Vietjet was recently listed by Airfinance Journal as one of the world’s 50 best airlines for healthy financing and operations, achieving a better ranking than many of the world’s most prestigious airlines.