Boeing wins $11.3 billion order for 100 planes from Vietnamese airline

Boeing won an order for 100 jets from VietJet Aviation  valued at $11.3 billion in list prices as Vietnam’s only private airline expands fleet amid a surge in travel.

VietJet will sign the agreement Monday in Hanoi during President  Obama’s visit to Vietnam. Delivery of the Boeing 737 Max 200 planes will run for four years beginning in 2019 and will help the carrier expand its fleet to 200 by the end of 2023, the company said in a statement.

According to market pricing data from aircraft valuation firm Avitas, the deal is worth approximately $5 billion after standard discounts.

This is only the second order for the high-density version of the 737 MAX, following a launch order from Ireland’s Ryanair.

The sales win is particularly important because VietJet was until now an all-Airbus customer. VietJet’s current fleet consists of 31 Airbus A320 jets and it has 20 more on order as well as 65 of the new model Airbus A320neos.

The highly political embrace of U.S. business during President Obama’s visit included not only the Boeing order but also the announcement that VietJet has chosen U.S.-built Pratt & Whitney engines for its pending A320neos.

The low-cost carrier, which started operations in December of 2011, is seeking to expand in a market that’s grown 20 percent annually in the last three years, according to the airline. At present, VietJet operates more than 250 flights a day with 50 routes in Vietnam and across the region to countries such as Thailand, Singapore, South Korea, Taiwan, China, Myanmar and Malaysia.

“They seem to be extremely ambitious,” said Brendan Sobie, Singapore-based chief analyst at CAPA Centre for Aviation. “They have established themselves domestically with a strong brand and high share of the market in a very quick time.”

VietJet will probably surpass national carrier Vietnam Airlines as the nation’s biggest domestic carrier this year, according to CAPA Centre for Aviation. Vietnam is expected to rank among the world’s 10 fastest-growing aviation markets in the next two decades, according to the International Air Transport Association.

The airline, known for its bikini-clad flight attendants, expects revenue to double this year from last year’s 10.9 trillion dong ($488 million) and to increase passenger capacity to 15 million after carrying 9.3 million in 2015.

Chief Executive Officer Nguyen Thi Phuong Thao said in an interview earlier this year that the carrier may come out with an initial public offering as early as the second quarter as it plans to build global routes and become a top budget airline in Asia,

“Vietnam doesn’t have as many low-cost carriers as other markets — it was underserved while other markets were overserved,” CAPA Centre’s Sobie said. “They had the timing. They entered into the market as Vietnam’s economy was growing.”

Seattle Times aerospace reporter Dominic Gates contributed to this report.