Rajah & Tann Asia has advised Vietjet on an USD8 billion agreement to acquire more than 400 advanced LEAP-1B engines from CFM International, as Southeast Asia’s aviation sector is once again poised for a wave of growth.
“Despite the downturn of the market caused by covid, the Southeast Asian market has now resumed its optimistic stance to gear up for an expansion wave (which was the case before covid),” Paul Ng, head of aviation at Rajah & Tann, told Asia Business Law Journal.
Rajah & Tann, led by Ng, has represented Vietjet, a Vietnamese low-cost airline based in Hanoi, in this agreement with CFM International, a joint venture between Safran Aircraft Engines and GE Aerospace.
This deal was finalised during the state visit of Vietnam’s general secretary and President To Lam to France that began on 7 October. The signing ceremony took place in Paris, attended by President Emmanuel Macron and high-level representatives from Vietnam and France.
Ng noted that this agreement reaffirms the ongoing support of airlines in the region for key engine manufacturers, particularly as these companies “suffered from technical and supply chain issues therefore denting confidence in their ability to deliver product in a timely manner”.
Delivery of the engines are scheduled to start in 2025 and will optimise Vietjet’s operating costs. The LEAP-1B engines will enhance fuel efficiency by 15-20% and reduce carbon emissions, aligning with Vietjet’s sustainable growth objectives.
A source with knowledge of the deal said CFM International was assisted by its in-house counsel.
