Bamboo Airways To Sign $2 Billion Boeing 787 Engine Agreement

Hanoi-based Bamboo Airways is about to sign a multi-billion dollar deal with General Electric to power its Boeing 787-9 Dreamliner aircraft with GEnx engines. The agreement is due to be signed next week.

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Bamboo Airways is signing a deal next week to power its Dreamliners with GEnx engines. Photo: Bamboo Airways

Bamboo Airways to buy GEnx engines for its Dreamliners

A report by Reuters values the transaction at US$2 billion and sets next Tuesday as the signing date. Delivery of the GEnx engines will begin in 2022. The report quotes a Bamboo Airways spokesperson saying;

“This new signing agreement will be an important milestone for the airline to expand its transcontinental flight network, connecting Vietnam with medium and long-range markets.”

Bamboo Airways has three Boeing 787-9s with another 11 on the way. The planes will form the backbone of the airline’s highly publicized international expansion plans.

The engine deal risks getting overshadowed by Bamboo’s first test flight to the United States on Thursday. In May, Bamboo Airways received approval from US authorities to begin flights there, only the second Vietnam-based airline to do so.

Thursday’s flight is a big deal for Bamboo Airways. Making nonstop flights work between Vietnam and the US is a challenging proposition. But the advent of modern, fuel-efficient planes like the Dreamliner may now make flying the relatively high traffic but low yield country pair viable.

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Bamboo Airways hopes to make US flights work using fuel-efficient engines like the GEnx. Photo: Bamboo Airways

GEnx engines may give Bamboo Airways the edge flying to the US

Critical to making long-haul low-yield flights are modern engines like the GEnx engines. General Electric says the GEnx engine offers up to 15% improved fuel efficiency compared to GE’s CF6 engine.

General Electric notes the GEnx is their fastest-selling, high-thrust jet engine to date, with 2,700-plus engines in-service and on order.

“The GEnx engine represents a giant leap forward in propulsion technology, using the latest materials and design processes to reduce weight, improve performance and deliver a more fuel-efficient commercial aircraft engine,” General Electric’s website says.

First flying in 2019, Bamboo Airways’ startup was perfectly timed to ride the Vietnamese aviation boom. But the airline did not reckon with COVID-19 and the subsequent travel downturn. Both curbed Bamboo’s international expansion plans.

Bamboo Airways remains keen on routes to Australia, the United Kingdom, and Germany. But the airline first set its sights on the United States, specifically flights to Seattle (SEA) and San Francisco (SFO).

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An undressed GEnx engine. Photo: General Electric

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Will a fuel-efficient engine be enough for Bamboo Airways?

Simple Flying’s in-house route analyst James Pearson notes over 1.8 million people flew between Vietnam and North America in 2019. He says that’s a sizeable market. While US authorities have, until recently, restricted Vietnam’s airlines from flying to the US, US-based airlines have had the option of flying nonstop to Vietnam, but haven’t.

Pearson says the problem is not passenger volumes but the low fares and long distances. This makes the routes very low-yielding and to date, unsustainable.

Now, more fuel-efficient engines attached to current generation aircraft like the Dreamliners and Airbus A350s may make nonstop flying between the two countries economically viable. At least, that’s what Bamboo Airways appears to be betting on.

While those GEnx engines won’t start appearing at Bamboo Airways until next year, it may well take the airline that long to establish their first flights to the United States. This week’s test flight is a step in the right direction, but the airline has significant logistical and procedural issues to work through before scheduled flights to the United States can begin.

But as Bamboo Airways noted this week, taking the GEnx engines is an important milestone working towards those long-haul flights – and making them work.

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