International finance groups eye Vietnam aviation market
Vietnam
Airlines, the national flag air carrier, received two new Airbus
321planes on March 10 as part of its purchase order with the European
aircraft manufacturer signed in 2009. The deal was facilitated by a 112
million USD loan from HSBC and Deutsche AG, two of the world’s
biggest lenders in commercial aircrafts . Others in the field include
the US Bank of America, Natixis, and French BNP Paribas.
The
French bank is now partnered with 128 air carriers and aircraft
chartering corporations all over the world. It has made the financial
arrangements worth tens of billions of dollars for the procurement of
125 aircrafts of various kinds over the last two years.
BNP
Paribas has arranged for 270million USD credit for VietJetAir to buy
three new aircrafts. The delivery of these aircrafts will happen later
this year.
Analysts said current climate is a good for Vietnamese
air carriers to obtain loans to increase their fleets. Many Asian
banks and finance leasing companies have jumped on the bandwagon,
creating fierce competitions in the aviation funding market, and
narrowing lenders’ profit margins, added analysists.
Jean-Francois
Lascombe, a senior executive of Natixis said that nowadays, finance
groups from Europe and the US can no longer dominate the aircraft
procurement funding field, as banks from China, Australia, Malaysia, the
Republic of Korea and Thailand are now jumping into the fray.
Asian
finance groups have realised that the business of fund aircraft
procurements is a lucrative one, due to the increasingly high demand for
aircrafts from the Asian carriers. It is expected that Asian nations
will need to purchase 13,000 aircraft, worth 1.9 trillion USD, over the
next 20 years.
Industrial and Commercial Bank of China, China
Construction Bank, Agricultural Bank of China, and Bank of China have
all set up finance companies in charge of funding aircraft procurements
and leasing projects. A part of VietJet Air’s plan to buy 63 aircrafts
has been funded by the China Construction Bank.
Many credit
institutions in Asia have also shown their interests in providing loans
in the aviation sector. These include the Development Bank of Japan, and
SMBC, a subsidiary of Sumitomo Mitsui Banking Corporation.
Nicolas
Parrot, a senior executive of BNP Paribas, noted that the Japanese have
returned to the market, which means that BNP Paribas has to look out
for the Japanese when considering its deals.
Analysts say that
given the appearance of many new financiers in the market, Vietnamese
air carriers have more opportunities to implement their ambitious plans
to expand their fleets. VietJet Air, for example, in 2013 signed a
contract for the purchase of 100 planes.-VNA