Australia’s aviation regulator is reviewing Vietjet’s financial capacity to maintain aircraft safety as part of its evaluation of the airline’s application to operate domestic flights under its subsidiary, Cherrie Air. The Civil Aviation Safety Authority (CASA) is assessing whether to grant an Air Operator’s Certificate (AOC) amid concerns raised by a global freezing order against Vietjet’s assets stemming from unpaid debts.

The order follows a legal dispute with FW Aviation (FWA), a Singapore-based aircraft finance and leasing company, to which Vietjet owes approximately $360 million for four Airbus A321 aircraft. In a recent judgment, UK Commercial Court Justice Pushpinder Singh Saini criticized Vietjet’s conduct as obstructive and described its evidence as “questionable.” The court found that Vietjet had acted more as a “won’t pay” debtor than a “can’t pay” one and noted the airline’s apparent resistance to settling its debts.

The dispute dates back to litigation initiated in October 2021, during which Vietjet was ordered to pay FWA but reportedly failed to comply. Complicating enforcement efforts, Vietnamese courts have refused to recognize the English court’s judgments. Additionally, following a Singapore court’s order permitting FWA to seize nine Vietjet aircraft, the carrier ceased operating those planes on routes to Changi Airport. Justice Saini highlighted this move as an active step to hinder debt recovery.

While the court’s ruling does not mandate Vietjet to cease operations, it is expected to disrupt the airline’s activities and impact its extensive order book, which includes over 200 Boeing and Airbus jets. The judgment revealed Vietjet transferred assets related to its aircraft orders to Angelica Holding Limited, a Cayman Islands shell company lacking employees or a viable business presence. Although Vietjet claimed that Angelica Holding was providing financing, the court found these arrangements to be artificial and illusory.

Justice Saini stated that Vietjet had not taken steps to settle or arrange payment for its debt, nor had it presented concrete proposals for addressing its financial obligations. Highlighting the freezing order’s rationale, the judge noted that Vietjet could avoid significant business disruption by paying what it owes to FWA.

Despite these challenges, Vietjet continues to operate international flights connecting Ho Chi Minh City with Sydney, Brisbane, Melbourne, and Perth, and plans to launch services to the new Western Sydney International Airport in 2027. According to recent data from the Bureau of Infrastructure, Transport and Regional Economics, the airline achieved passenger load factors of 87 percent inbound and 72.3 percent outbound in July. In the most recent financial year, the Hanoi-based carrier reported nearly $4.5 billion in revenue and a pre-tax profit of $146.8 million.

Founded 15 years ago by billionaire Nguyen Thi Phuong Thao, who also serves as chairwoman, Vietjet is co-owned by Sovico Holdings. The airline has been approached for comment but has not issued a response. CASA declined to comment specifically on the freezing order but confirmed it routinely conducts financial viability assessments as part of the AOC approval process.