Vietnam Airlines to buy 12 Boeing 787s

HANOI, Oct 1 (Reuters) Vietnam Airlines signed a memorandum of understanding to buy 12 Boeing 787-8 Dreamliner aircraft, the company said.

The first plane would be delivered in 2015, the unlisted state-run airline said in a statement on Monday.

The memorandum, signed last week in New York, follows a 2005 Vietnam Airlines contract to buy four Boeing 787-8 airplanes for delivery in 2009 and 2010.

It coincides with a visit to France, home to Boeing rival Airbus, by Vietnamese Prime Minister Nguyen Tan Dung. Industry attention will be on whether Airbus manages to match Vietnam's order for 12 of Boeing's long-range, mid-sized airliners with equivalent sales of its own future A350 jetliner.

The two aircraft are competing head to head in one of the most promising parts of the global aviation market, though Boeing has a five-year head start and a strong lead in sales over its rival.

Dung was due to meet President Nicolas Sarkozy later on Monday.

Plane orders are often timed to coincide with such state visits. Airbus declined to comment.

Boeing and EADS subsidiary Airbus have been competing for market share in Vietnam, which has one of the fastest-growing economies in the world after China.

Vietnam Airlines said it aims to add 20 Boeing 787-8s to its fleet of 86 aircraft by 2015 and expand the Boeing planes to 28 by 2020 when its fleet rises to more than 110 planes.

It plans to open the first direct route linking Ho Chi Minh City, formerly Saigon, with Los Angeles in late 2008 with five flights weekly on Boeing 777-200 ERs.

The airline has 45 planes in its fleet, including 10 Boeing 777-200ERs, three Airbus A-330s, 10 A-321s, 10 A-320s, 10 ATR-72s and two Fokker-70s.

Toulouse-based ATR is a venture of EADS and Alenia Aeronautica.

REUTERS SR RN1732