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The Vietnam News

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ABN Amro finances Vietnam Airlines' purchase of three Airbuses

HANOI - Dutch bank ABN Amro will finance the purchase of three Airbus A321-200 aircraft by Vietnam Airlines in a deal guaranteed by the export credit agencies of Britain, France and Germany, officials say.

The three planes are part of a five-jet deal inked in October 2002 between the state-owned flag carrier and the European consortium as part of its ambitious fleet and route expansion programme. The trio of export credit agencies will guarantee 85 percent of the three aircraft, which are estimated to cost 150 million dollars, if Vietnam Airlines or the Ministry of Finance default on the 12-year loan from ABN Amro. The deal still has to be signed off by the three agencies but no problems are anticipated, according to ABN Amro. Of the five aircraft in the October 2002 deal, the first two are due to be delivered in July, with the third arriving the following month.

"These will be used on our short haul routes. They are part of our Southeast Asian and domestic route expansion programme," Pham Ngoc Minh, deputy director of Vietnam Airlines told AFP. The two other A321-200 jets, which can carry about 200 passengers and have a maximum range of 5,600 kilometres, will be financed by the airline and Vietnamese commercial banks, he said. Both are scheduled to be put into operation this year, according to general director Nguyen Xuan Hien.

Last August the airline took delivery of the first of four long-distance Boeing 777-200ER aircraft, funded by Citigroup and guaranteed by the US Export-Import (Ex-Im Bank). The second jet, which was financed by ABN Amro and also guaranteed by Ex-Im Bank, was put into operation in October. The remaining two Boeings are expected to come into service in late 2004 and 2005.

In the past year, Vietnam Airlines, which flies to about 25 international destinations, has inaugurated a number of new routes and has earmarked further expansion, including flights to the United States by the end of 2005. To meet its burgeoning expansion, the carrier announced in January plans to double its fleet by 2010 in a bid to establish itself as a major player in the regional aviation industry.

"Vietnam Airlines has had a good evolution over the past decade and it is clear now that we need to have more planes to develop and modernise our fleet," company spokesman Nguyen Chan said then. Vietnam Airlines currently has 34 wholly owned or leased planes but envisages operating 49 aircraft by 2005, increasing to 73 by 2010.

Airbus said in December that it hoped to sell the carrier its new range of long-haul jets, in particular the A340-500. Boeing also said last year it expects Vietnam Airlines to buy at least 10 more planes from the US aerospace giant over the next six years. The carrier, however, has declined to provide any details about its aircraft purchase or lease plans.

Vietnam Airlines has set itself a target of carrying 4.96 million passengers this year, up from 4.05 million in 2003. In the first quarter of this year it carried 1,222,000 people and 22,095 tonnes of goods.

Agence France Presse - April 5, 2004