In the news:
Airbus seals big A320 order from VietJetAir
Low cost carrier VietJetAir signed a deal Tuesday to buy more than 90 Airbus jets.
SINGAPORE — Low cost carrier VietJetAir signed a deal Tuesday to buy more than 90 Airbus jets.
The order is worth about $9 billion at list prices, but airlines get large discounts on big orders so the real price is likely around $4 billion, according to estimates from aircraft valuation firm Avitas.
VietJetAir’s A320 deal is the only major purchase announced so far at the Singapore Airshow though other agreements may be announced in coming days.
The budget carrier and Airbus had a preliminary agreement last year but it wasn’t included in Airbus’s order book for 2013.
The deal includes confirmed orders for 63 of the single aisle A320 jets and 30 options to purchase. VietJetAir will also lease another eight A320s.
The airline, which flies to dozens of destinations within Vietnam and a handful of overseas routes, said the A320 would help it lower operating costs.
Airbus spent most of its first news conference at Asia’s biggest aerospace and defense show stressing the importance of Asia to its business. Asian airlines are expanding aggressively due to strong economic growth.
“The message is clear. This is where the action will be,” said Fabrice Bregier, president and CEO of Airbus.
The company forecasts the region will need some 11,000 aircraft worth more than $1.8 trillion over the next 20 years.
The European company’s projections are lower than its rival Boeing, which is expecting Asia’s airlines to buy 12,820 aircraft worth $1.9 trillion.
Airbus said increasing demand for travel from bigger middle classes in countries such as China, the world’s second largest economy, will drive growth for its jets.
It expects China to replace the U.S. as the biggest domestic travel market within 20 years.