VietJetAir (VJ, Hanoi Noi Bai International) is defending a USD191 million lawsuit relating to four A321neo family aircraft amid allegations of unfair play by the lessor and claims of government interference in the repossession process. VietJetAir says fighting the case is about defending its legitimate business interests.

The Commercial Court of the UK High Court is now hearing the matter of FW Aviation (Holdings) 1 Limited v. VietJet Aviation Joint Stock Company (case no: CL-2022-000467). The case concerns two A321-200s, one A321-200N, and one A321-200NX. VietJet handed over the aircraft to FitzWalter late last year, who promptly re-registered them to Guernsey. However, an injunction issued by the People’s Court in Hanoi has seen those planes kept in Viet Nam. According to ch-aviation Commercial Aviation Aircraft Data data, 2-FWCA (msn 8577); 2-FWCB (msn 8592); and 2-FWCC (msn 8906) are at Hanoi Noi Bai International, while 2-FWCD (msn 8937) is at Ho Chi Minh City.

FW Aviation (Holdings) 1 Limited is a special purpose vehicle (SPV) owned by London-based FitzWalter Capital Ltd, which describes itself as a global private investment firm with interests in various asset classes, including aircraft. Of its five partners, four are ex-Macquarie AirFinance alumni. VietJet Aviation Joint Stock Company, trading as VietJetAir, is the largest low-cost airline in Viet Nam. It operates 81 aircraft to 80 destinations in 13 countries. It also has an additional 262 aircraft on order.

The case dates back to 2021 when FitzWalter took over the aircraft already placed at VietJet by another lessor. VietJetAir says it had negotiated a reduction in lease payments with the original lessor due to the pandemic and the near shutdown of Viet Nam's airline industry. FitzWalter says the airline fell behind on its due lease payments and breached its contract. Papers later filed at the High Court reveal VietJetAir was initially sued for USD155 million, but with a claimed interest rate of USD31,000 per day, that amount has grown. VietJetAir does not deny that it missed "some" lease payments. However, in a recent media statement, VietJetAir said it "did not accept that the aircraft's original lessors suddenly sold the airline's aircraft loans to FW Aviation and invalidated the existing long-term leasing contract with VietJet, which allowed FW Aviation to take possession of the aircraft."

Clouding what may otherwise be a relatively straightforward lease dispute is the Vietnamese court injunction holding the aircraft in that country. Bloomberg reports that a VietJetAir shareholder (not Nguyen Thi Phuong Thao) sought that injunction with the backing of the Vietnamese government. One high-profile shareholder told a FitzWalter partner that "this could go on for years." In response, FitzWalter commenced legal action in Singapore, resulting in Viet Nam's People's Court later withdrawing its injunction. The aircraft are now expected to be repatriated from Viet Nam later this year after being returned to airworthy status and securing government approvals.

Despite losing the planes, VietJetAir says it will fight the ongoing matter in the UK court. "For all airlines, a fleet is the foundation of sustainable development. However, FW Aviation still unilaterally grounded the aircraft, and changed their registration information without following local authorities' regulations and laws," the airline's statement reads.

"As aircraft shortage becomes an issue for airlines around the world, the fact that FW Aviation unilaterally changed the aircraft's registration also caused significant losses when all of the four aircraft were grounded and failed to create added value for the industry in a long time. VietJet, and its co-founder Madame Nguyen Thi Phuong Thao, are rightly proud of their integrity and committed to retaining good relationships, as well as fulfilling all obligations as agreed with suppliers and other partners in the industry. The commercial dispute between Vietjet and FWA is expected to be heard in mid-2024. We are and will continue to defend ourselves to protect our legitimate interests and believe that justice will prevail."