VietJet Receives First Boeing 737 MAX After Nine Year Delay

VietJet’s Historic Boeing 737 MAX Delivery: A Nine-Year Journey from Promise to Reality

VietJet Air’s delivery of its first Boeing 737 MAX aircraft, more than nine years after placing the initial order, marks a pivotal moment in the aviation industry. This milestone is not simply a matter of fleet expansion, it is a story woven through regulatory upheaval, international diplomacy, and the rapid growth of Vietnam’s aviation sector. The handover, scheduled at Boeing’s Seattle factory and attended by Vietnam’s President Luong Cuong, represents the culmination of a complex procurement saga and the start of a new era for both VietJet and the broader Southeast Asian aviation market.

The significance of this Delivery extends beyond the airline itself. It reflects the resilience of Vietnam’s aviation industry, the evolving landscape of US-Vietnam trade relations, and the global repercussions of the Boeing 737 MAX crisis. As VietJet integrates the 737 MAX into its fleet, the implications will ripple through Airlines strategies, manufacturer competition, and regional infrastructure development.

This article explores the historical context of VietJet’s Boeing order, the safety and regulatory challenges that led to years of delays, the strategic importance for trade and industry, and the broader impact on Southeast Asian aviation.

Historical Background of VietJet and the Boeing Order

VietJet’s journey with Boeing began in May 2016 during a high-profile ceremony in Hanoi, attended by leaders from both Vietnam and the United States. The airline, led by CEO Nguyễn Thị Phương Thảo, signed an agreement for 100 Boeing 737 MAX aircraft, valued at approximately $11.3 billion at list prices. This was the largest commercial airplane purchase in Vietnam’s history at the time and marked VietJet’s first move away from its all-Airbus fleet.

The deal was strategically significant for both parties. For VietJet, it represented a diversification of its fleet and a step toward expanding its international route network. For Boeing, it was an opportunity to gain a foothold in a market dominated by Airbus. The agreement was also seen as a symbol of strengthening US-Vietnam trade relations, with the aircraft order contributing to bilateral trade turnover.

VietJet’s rise was rapid. Founded in 2007 and commencing operations in 2011, it quickly became a major player in Vietnam’s aviation sector. By the end of 2015, the airline had carried over 25 million passengers, laying the groundwork for ambitious fleet expansion and international growth.

Boeing 737 MAX Crisis and Grounding

The trajectory of VietJet’s Boeing order was dramatically altered by the global crisis surrounding the Boeing 737 MAX. Two fatal accidents, Lion Air Flight 610 in October 2018 and Ethiopian Airlines Flight 302 in March 2019, led to the grounding of the entire 737 MAX fleet worldwide. Investigations revealed that a key system, the Maneuvering Characteristics Augmentation System (MCAS), malfunctioned due to reliance on a single angle-of-attack sensor, causing repeated nose-down commands that pilots struggled to counteract.

The crisis exposed flaws in Boeing’s design and certification process, as well as gaps in pilot training. Many pilots were unaware of the MCAS system due to its omission from official manuals and training programs. The grounding, which began in March 2019, lasted nearly twenty months and affected over 400 aircraft in operation, with thousands more on order or in production.

The impact was far-reaching. Airlines had to cancel flights, halt deliveries, and reassess their fleet plans. The psychological effect on passengers was significant, with trust in the 737 MAX eroded. Regulatory agencies, including the FAA and EASA, implemented comprehensive reviews and mandated design changes before recertifying the aircraft for service.

“It’s pretty asinine for them to put a system on an airplane and not tell the pilots who are operating it.” — Allied Pilots Association representative

Nine Years of Delays: From Promise to Delivery

VietJet’s original delivery schedule for the 737 MAX, set for 2019 to 2023, was disrupted first by the grounding and then by the COVID-19 pandemic. The pandemic further depressed global travel demand, forcing airlines to delay or cancel orders and seek financial stability. For VietJet, this meant postponing its first Boeing delivery until 2025, several years behind the initial plan.

During the grounding, Boeing redesigned the MCAS system, requiring input from both angle-of-attack sensors and enhancing pilot override capabilities. Regulatory authorities conducted independent reviews, with EASA identifying systemic issues beyond just the MCAS. The recertification process was exhaustive, involving flight tests, documentation reviews, and new pilot training requirements.

VietJet also faced financial pressures during this period, prompting the airline to diversify into other business areas and seek new partnerships. Despite these challenges, VietJet maintained its commitment to the Boeing order, viewing it as essential to its long-term strategy.

Strategic Implications for US-Vietnam Trade Relations

The delivery of the first Boeing 737 MAX to VietJet carries diplomatic and economic weight. With Vietnam’s President attending the handover in Seattle, the event underscores the importance of aviation deals in US-Vietnam trade relations. Aircraft purchases are part of Vietnam’s broader strategy to address its trade surplus with the US and mitigate the impact of tariffs on Vietnamese exports.

In recent years, Vietnam has faced increased tariffs from the US, prompting the government to demonstrate commitment to rebalancing trade through high-value American imports, including Boeing aircraft. Other Vietnamese airlines have also signaled interest in acquiring more Boeing jets, challenging Airbus’s dominance in the market.

This alignment with Boeing is also a response to regional competition, particularly as China promotes its own COMAC C919 aircraft in Southeast Asia. Vietnam’s decision to proceed with Boeing reflects a strategic choice to align with US aerospace standards and technology.

“The purchase of Boeing planes is part of Vietnam’s strategy to cut its large trade surplus with Washington and reduce US tariffs on its goods.” — US and Vietnamese officials

Vietnam’s Aviation Market Growth and Position in Southeast Asia

Vietnam’s aviation sector is among the fastest-growing in the world. According to Boeing, Southeast Asia leads global aviation growth, with Vietnam at the forefront, experiencing annual growth rates exceeding 8%. Passenger volumes are expected to double in the next decade, driven by economic expansion and rising middle-class demand for air travel.

The sector’s economic impact is substantial. Aviation directly employs approximately 100,000 people in Vietnam and contributes $1.9 billion to GDP, with broader economic benefits from tourism and supply chain activity totaling $17.5 billion and supporting 2.5 million jobs. Infrastructure investments, such as the expansion of Tan Son Nhat International Airport and the planned Long Thanh International Airport, are critical to accommodating future growth.

The domestic market is robust, with routes like Hanoi–Ho Chi Minh City ranking among the busiest in Southeast Asia. In the first half of 2024, Vietnamese airlines carried over 54 million passengers, highlighting the sector’s resilience and potential for further international expansion.

VietJet’s Fleet Strategy and Market Position

VietJet’s fleet strategy is characterized by diversification and expansion. The airline operates a young fleet of over 120 aircraft, primarily Airbus A320-family jets and A330 widebodies, but is now integrating Boeing 737 MAX aircraft. This move reduces dependence on a single manufacturer and enhances operational flexibility.

The airline has placed significant orders with both Boeing and Airbus, including a recent order for 20 Airbus A330-900 aircraft. VietJet’s Thai subsidiary has also committed to Boeing, ordering 100 737 MAX jets. These investments support the airline’s international growth ambitions and help hedge against supply chain or technical risks associated with a single supplier.

VietJet’s dual-manufacturer approach positions it to serve a diverse network of domestic and international routes, leveraging the operational efficiencies and fuel savings offered by the latest aircraft models.

The Broader Impact on Boeing and Southeast Asian Aviation

The VietJet delivery is a strategic win for Boeing in a region where Airbus has long held the upper hand. Currently, Airbus supplies the majority of aircraft operated by Vietnamese airlines, but Boeing’s recent deals signal a shift. Southeast Asia’s aviation market is projected to reach nearly $48 billion by 2030, with single-aisle jets like the 737 MAX expected to dominate new deliveries.

Boeing’s success with VietJet could influence procurement decisions by other carriers in the region, especially as competition intensifies with the emergence of Chinese manufacturers like COMAC. The ongoing need for workforce development and local partnerships will be crucial as the industry recruits and trains the next generation of pilots, engineers, and ground staff.

The broader implications include increased competition, greater choice for airlines, and a more resilient aviation ecosystem in Southeast Asia. The outcome of VietJet’s integration of the 737 MAX may serve as a benchmark for other airlines considering similar fleet diversification.

“Vietnam’s aviation sector is projected to double in passenger volumes within the next decade, reaching over 75 million travelers annually.” — Boeing Commercial Market Outlook

Conclusion

VietJet’s first Boeing 737 MAX delivery, after nearly a decade of delays, is a testament to the airline’s resilience and the evolving dynamics of the global aviation industry. The journey from order to delivery has encompassed regulatory crises, a pandemic, and shifting trade priorities, but ultimately positions VietJet as a leader in fleet modernization and regional expansion.

The event underscores the strategic importance of aviation in US-Vietnam relations and highlights the competitive landscape shaping Southeast Asian aviation. As VietJet begins operating the 737 MAX, its experience will provide valuable insights for the industry, influencing future procurement and operational strategies across the region.

FAQ

Question: Why did VietJet’s Boeing 737 MAX delivery take so long?
Answer: The delivery was delayed by the global grounding of the 737 MAX after two fatal crashes, followed by the COVID-19 pandemic and shifting fleet priorities.

Question: What is the significance of this delivery for US-Vietnam relations?
Answer: The delivery demonstrates Vietnam’s commitment to balancing trade with the US and strengthens diplomatic and economic ties between the two countries.

Question: How does the 737 MAX differ from previous models after recertification?
Answer: The recertified 737 MAX features redesigned safety systems, including dual sensor input for the MCAS, improved pilot override capabilities, and enhanced training requirements.

Question: What are VietJet’s future fleet plans?
Answer: VietJet is diversifying its fleet with both Boeing and Airbus aircraft to support international expansion and reduce reliance on a single manufacturer.

Question: How is Vietnam’s aviation sector expected to grow?
Answer: Vietnam’s aviation market is projected to double passenger volumes within a decade and play a leading role in Southeast Asia’s aviation expansion.

Sources

• Reuters