Vietnam Airlines to buy General Electric engines for 787s

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Vietnam Airlines has agreed to order General Electric engines to power its Boeing Co 787 Dreamliners, according to Vietnamese government officials.

The number of engines in the order could not be learned. The order is due to be formally announced next month in Brunei, Vu Huy Hoang, Minister of Industry and Trade for Vietnam, told Reuters.

For the 787 deal, "President Obama wants to witness the signing ceremony in Brunei," Hoang said.

General Electric declined to comment. Boeing said that Vietnam Airlines has existing orders for eight 787s and orders for another 11 787s through leasing companies.

The Vietnamese Prime Minister Nguyen Tan Dung, speaking through a translator, said he wanted to formally announce the details of the engine deal on Friday, but the White House had asked for the delay until October.

Separately, Dung said Vietnamese budget airline VietJet is in talks to buy Boeing 737 airplanes and that the contract should be signed soon.

"The initial agreement, which is of Boeing 737 between VietJet and Boeing, is also another contract to be signed shortly," Dung said.

The officials spoke at a Vietnam investment forum in New York sponsored by the International Economic Alliance and the Asia Society.

The prime minister's comments highlighted questions around Vietnam's expansion into regional aviation markets, coming just days after the country's first privately owned airline placed a $9 billion Airbus order. Following the comments about a possible Boeing purchase by VietJet, the airline itself dampened the prospect of an imminent order with Boeing.

VietJet Managing Director Luu Duc Khanh said after signing the $9 billion Airbus order in Paris on Wednesday that the airline had so far opted to use a single aircraft type. A spokeswoman for the airline reaffirmed the comments on Friday.

Most low-cost carriers prefer to stick to one type of aircraft to contain the cost of training and spare parts, but long delivery lead times in the wake of a boom in aircraft orders has forced some to split their orders.

According to Khanh, Vietnam has 0.7 passenger aircraft for every 1 million people in its population, compared with 7 in Malaysia and 15 in Australia.

Vietnam Airlines, the traditional national flag carrier, has a mixed fleet of Airbus and Boeing jets and has ordered both the Boeing 787 and its future competitor, the Airbus A350.

It has also expressed interest in the Airbus A380 superjumbo.

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