VietJet flights out of Changi unlikely to be affected despite carrier’s legal troubles: Experts

SINGAPORE – VietJet passengers flying out of Changi are unlikely to face disruptions to their travel plans despite a British court’s ruling to freeze the low-cost carrier’s worldwide assets over a US$250 million (S$319 million) debt.

However, lawyers The Straits Times spoke to said the budget airline will not be able to sell, move or hide its assets by transferring ownership, for instance. Daily operations, including flights, can continue as usual.

Checks on the Changi Airport website found that VietJet operates about 58 flights a week out of Singapore, on four non-stop routes.

The flights serve Ho Chi Minh City, Hanoi, Da Nang and Phu Quoc. A fifth route to Nha Trang is slated to start in December.

On Oct 15, a British court froze up to US$251.6 million in VietJet assets, including its fleet of aircraft, engines that it has ordered but is yet to receive, as well as pre-delivery payments, lease deposits and maintenance reserves.

The asset freeze ruling stems from VietJet’s long-running dispute with aircraft leasing firm FW Aviation over missed rental payments during the Covid-19 pandemic for four Airbus A321 aircraft.

The court said it issued the ruling because there is a “real risk” of VietJet attempting to hide its assets, such as when it transferred the economic value of its order book to a company in the Cayman Islands that appeared to have no office and no staff.

London-based lawyer Guy Marrison, a partner in the aerospace team at HFW law firm, told The Straits Times that the order does not have a direct effect in Singapore unless it is registered and recognised by the Singapore court.

He said: “The purpose of the latest order is to preserve VietJet’s assets for enforcement purposes. The idea is not to freeze the whole business or cause disruption. The business needs to continue as usual, otherwise it will not be able to pay the judgment debt.”

He added that breaching the order could carry serious consequences, including contempt proceedings, which may result in fines, asset seizures, and even imprisonment in some cases.

When asked if such an application has been made, a spokesperson for the Singapore Courts said: “As the court proceedings – including enforcement – are ongoing, we are unable to provide further information on the matters raised.”

On May 5, the Singapore High Court issued an order linked to the dispute between VietJet and FW Aviation. It ruled that VietJet’s nine Airbus aircraft were to be seized if they landed in Singapore.

On Oct 15, the Commercial Court – an arm of the British High Court in London – issued a judgment, seen by The Straits Times.

It said: “It is not in dispute that VietJet immediately reduced, and then appeared to stop altogether, flights of those nine aircraft to Singapore. 

“VietJet admits that by no longer flying those aircraft to Singapore, it has taken active steps to prevent enforcement.”

Lawyer Melvin Lum, who is a director at Quahe Woo & Palmer LLC, said the Civil Aviation Authority of Singapore (CAAS) is unlikely to wade into the commercial dispute.

CAAS, he added, is not required to suspend VietJet’s licence despite its legal troubles, unless it finds that flight safety, aircraft maintenance, or the airline’s ability to operate is compromised.

WongPartnership, which is representing FW Aviation in Singapore, declined to comment on ongoing legal matters.

Aqil Hamzah is a transport journalist at The Straits Times. He is also interested in issues related to crime and technology.

Esther Loi is a journalist at The Straits Times, where she covers transport issues.