The Vietnam International Financial Centre in Ho Chi Minh City and Vietjet have launched the Asia-Pacific Aviation Financial Hub (AAFH), an initiative under VIFC-HCM.
The initiative was launched at the Singapore Airshow.
“The launch of the Asia-Pacific Aviation Financial Hub marks an important step in realizing our vision of building VIFC into a modern, open, and trusted international financial platform," said VIFC-HCM chairman Truong Minh Huy Vu. ”We attract investors not only through incentives, but through institutional quality, innovation capacity, and our ability to directly connect capital flows with the real economy.”
The hub is expected to facilitate around $50bn in transaction value by 2035, which will open up new investment opportunities and enable greater investor participation in both Vietnam and the wider region's aviation industry.
Vietjet's agreements signed during the airshow, worth over $6.1bn, will anchor the new hub. This includes its agreement with Pratt & Whitney to power 44 A321neo and A321XLR aircraft with the GTF engine. The airline also signed aircraft financing agreements, including with asset management firm Pacific Management Company (PIMCO).
“Asia-Pacific is projected to become the world’s largest aviation market in the coming decades," said Vietjet in a press release. "With the participation of Vietjet and global partners such as Airbus, Boeing, and leading aircraft engine manufacturers, the Asia-Pacific Aviation Financial Hub is expected to emerge as a new destination for international aviation finance capital.”
“The Asia-Pacific Aviation Financial Hub marks a strategic milestone in reshaping how global capital supports the advancement of aviation and the broader economic landscape of Vietnam and the region,” said Vietjet Nguyen Thi Phuong Thao.
The announcement ceremony was attended by global aircraft and engine manufacturers and financial institutions, including Airbus, Boeing, CFM International, Pratt & Whitney, Rolls-Royce, and the International Air Transport Association (IATA).
Vietjet has been making strides in growing its fleet, with nearly 600 aircraft on order. In October last year, Vietjet finalised an order for 100 Airbus A321neo jets.
“Airbus highly values the role of the Asia–Pacific Aviation Financial Hub in establishing an effective platform that connects the demand for next-generation fleet development with the global financial ecosystem,” said Airbus EVP Paul Meijers.
The new platform aims to offer specialised policy incentives for aviation finance under the legal framework of VIFC. This includes competitive tax and fee policies, liberalised capital flow and foreign exchange mechanisms, multi-currency payment and flexible cross-border mechanisms, and an international-standard legal framework to protect asset rights and attract global talent.
These solutions are set to be delivered through a ‘one-stop, multi-service’ model, which will help optimise costs and improve operational efficiency across the aviation value chain. The model aims to “seamlessly” connect finance, airport infrastructure, free trade activities, MRO services, training, and logistics.