Strong economic growth and a burgeoning middle class has increased demand for travel both domestically and abroad, spurring carriers to increase routes.

In deals announced at the start of a two-day visit to the Southeast Asian nation by French President Francois Hollande, Vietnam Airlines, the country's flagship carrier, reached a preliminary agreement for 10 A350 planes worth $3.1 billion.

The widebody aircraft will allow the airline to expand its long-haul network, beginning with services between Ho Chi Minh City and Los Angeles.

Budget airline Jetstar Pacific - controlled by Vietnam Airlines and 30 percent owned by Australia's Qantas Airways (QAN.AX) - finalised its order for 10 A320 single-aisle planes valued at about $1 billion.

VietJet, the country's only private airline, placed a firm order for 20 A321s - worth $2.4 billion.

VietJet has been rapidly expanding both at home and in Southeast Asia and the deal comes on top of an order for 100 Boeing 737 MAX 200 jets in May worth $11.3 billion at list prices - the biggest aircraft order in the country's history.

The CAPA Centre for Aviation said in January that VietJet commands 40 percent of Vietnam's domestic market and it will likely surpass Vietnam Airlines this year as the country's biggest domestic carrier.

By Ho Binh Minh - Reuters - September 6, 2016


VietJet buys $2.39 billion in Airbus planes

Vietnam budget carrier VietJet Aviation has signed a $2.39 billion order with Airbus Group SE to buy more than 20 A321 planes, the company said Tuesday, just a few months after signing an $11 billion deal to buy 100 planes from Boeing Co.

The agreement, witnessed by French President François Hollande, who is visiting Vietnam, provides for the aircraft to be delivered between 2017 and 2020.

Airbus Tuesday also said it signed a memorandum of understanding with Vietnam Airlines to acquire 10 more A350-900 long-range jets, doubling the size of it fleet of the widebody planes. The deal carries a list price value of about $3 billion.

The order underscores the rapid expansion of the budget carrier since it began operating in 2011. The country’s only privately owned carrier, VietJet is also set to become Vietnam’s largest carrier, eclipsing state-owned rival Vietnam Airlines, aviation analysts say. In addition to Tuesday’s announcement and the previous $11 billion order with Boeing to buy 737 jets, unveiled during U.S. President Barack Obama’s visit to the country in May, VietJet agreed last year to buy 30 Airbus A321 planes for $3.6 billion.

“VietJet is developing robustly and sustainably with an aim at better serving our passengers and promoting tourism and economic development in Vietnam and other regional countries,” said airline President and CEO Nguyen Thi Phuong Thao.

Vietnam is one of the fastest-growing aviation markets in Asia, which itself is one of the fastest-growing regions for the industry. VietJet previously has noted that the Vietnam market has grown 20% in each of the past three years, and the airline is adding new international routes to cater to growing demand for outbound travel from the country’s growing middle class.

Airbus also said it finalized a purchase agreement with Vietnam’s Jetstar Pacific Airlines for the sale of 10 A320 single-aisle planes valued at $980 million at list prices. The carrier owned, by Vietnam Airlines and Qantas Airways Ltd. , is already leasing 12 of the Airbus narrowbodies, the European plane maker said.

By Vu Trong Khanh - The Wall Street Journal - September 6, 2016