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Aircraft Makers See Opportunity in Vietnam : Southeast Asia: Country is seeking to make its state-run airline a powerful regional carrier.

October 02, 1995|From Associated Press

The world's biggest aircraft makers are lining up to help Vietnam transform its tiny flagship airline into a powerful regional carrier.

But company representatives say that sales to state-run Vietnam Airlines will be slow in coming, and none of the makers foresee a chance to dominate the local market.

"You've go to be patient," said Antoine Lahary, sales research manager for Europe's Airbus Industrie consortium. "They're coming from nowhere, so they can't buy 40 aircraft right away."

Vietnam Airlines officials have said they want to buy between 30 and 40 Western-built craft--worth up to $3 billion--by the year 2000 to replace their aging fleet.

Vietnam Airlines already leases eight Airbus A-320s and four Boeing 767s, with foreign cockpit crews, for its international air routes and longer domestic flights. It has steadily expanded its overseas network and now flies to at least 25 foreign cities.

Industry analysts say Vietnam's strong economic growth, good tourism prospects and population of 72 million could help propel the airline into the same league as regional carriers such as Thai Airways International, Singapore Airlines and Hong Kong-based Cathay Pacific Airways.

"They're going to have to get to that level because that's the competition in Asia," said Robert Laird, regional sales director for Seattle-based Boeing Co. "And I believe they have the potential to do it."

Seeking to raise their local profile, Boeing, St. Louis-based McDonnell Douglas Corp. and Airbus all participated last month for the first time in an aviation trade fair in Vietnam.

Vietnam's projected needs for passenger jets have tantalized many aircraft manufacturers, but none expects the Vietnamese airline to turn to a single company for all its new planes.

"If you are a wise purchaser, you always buy from at least two sources of supply that you can play off against each other," Lahary said.

Vietnam Airlines has shown its ability to drive a hard bargain. McDonnell Douglas offered 100% financing for its 150-seat MD-90 aircraft in February. The model competes directly with the Airbus A-320, which Vietnamese pilots are already helping to fly.

"We had to come up with a very attractive offer compared to what they're using now," said Thi X. Tran, McDonnell Douglas' chief representative in Vietnam.

Tran said he does not expect the Civil Aviation Authority of Vietnam to authorize any purchases until 1996 at the earliest.

The authority has said it is waiting for the U.S. government to offer export guarantees for sales by Boeing and McDonnell Douglas before it makes a final decision.

The United States, which only established diplomatic relations with Vietnam in August, has not made Export-Import Bank financing available yet to American companies exporting here. Airbus already offers government export credits.

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