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Boeing Stock Jumps With $16 Billion Vietnam Deal Amid Trump-Kim Summit

Last Updated September 23, 2020 12:27 PM
Mark Emem
Last Updated September 23, 2020 12:27 PM

North Korean leader Kim Jong-un may have traveled to Vietnam for the much-hyped Trump-Kim summit by train but some of the major business deals that will be conducted on the sidelines of the meeting will involve air travel.

Per Reuters , Vietnamese startup airline Bamboo Airways is set to ink a deal to acquire 10 Boeing 787 passenger jets. This is in addition to an order the airline placed in 2018 for 20 Boeing 787 planes. The new order is valued at $3 billion according to a source who spoke to Reuters.

Currently, Bamboo Airways’ fleet consists largely of Airbus planes and this is mostly the narrow-body models.

Since the year started, Boeing’s stock has risen by over 30% and recently touched an all-time high of almost $430.

Boeing stock price | Source: TradingView

Boeing to Bag Yet Another Deal in Hanoi

Vietnamese budget airline VietJet is also set to sign an agreement with Boeing ahead of the Trump-Kim summit. VietJet will sign the deal to acquire 100 Boeing 737 MAX passengers worth nearly $13 billion.

Additionally, VietJet is expected to finalize another provisional deal it had inked with Boeing in 2018 at the biennial Farnborough Airshow.

Direct Vietnam to U.S. flights

The Vietnamese airlines are making the passenger jet purchases following the awarding of a Category 1 safety rating to Vietnam by the U.S. Federal Aviation Administration. The rating allows authorized Vietnamese airlines to not only fly directly to the United States but also codeshare with U.S. carriers, according to an FAA statement :

With the Category 1 rating, Vietnamese air carriers that are able to secure the requisite FAA and DOT authority can establish service to the United States and carry the code of U.S. carriers.

Bamboo Airways is already planning to fly directly to the U.S. beginning late this year or early next year. Boeing is expected to deliver the first 787 jet, suitable for long-haul flights, beginning in next year’s Q3. Per the chairman of the startup airline, Trinh Van Quyet, Boeing has lent enormous support to Bamboo Airways over this:

Direct flights between Vietnam and the U.S. will not only push tourism activities, but also further facilitate bilateral trade and investment. We are receiving huge support from Boeing to deploy our flights to the U.S.

Vietnamese Carriers Keeping the Tradition

The deals between Boeing and the Vietnamese airlines seem to be in line with a recent tradition where the carriers have been announcing major deals during visits by foreign heads of states and governments.

Last year in November, a deal between VietJet and Airbus was finalized for the purchase of 50 A321neo jets . The $6.5 billion deal was finalized during a visit by the Prime Minister of France, Edouard Philippe, to Hanoi.

In 2016 when ex-U.S. President Barack Obama was in Hanoi, VietJet inked an agreement to purchase Boeing 737 Max planes numbering 100.