Local and international banks offer finance, with the total value of 2010-2011 deliveries $2.8 billion
Emirates airline has received offers from local and international banks to fulfil its financing needs for the purchase of aircraft to be delivered post May 2011, according to a senior airline executive.
Having already arranged financing for its aircraft deliveries up to May 2011, Emirates is still discussing potential financings beyond that date, said Brian Jeffery, Emirates' Senior Vice-President for Commercial Treasury.
"We have received offers of finance from local and international banks that encompass both Islamic and conventional markets," he told Emirates Business, adding that the carrier always has ongoing contact with all its relationship banks.
Asked if Emirates would consider the bonds route to raise finances, Jeffery said: "We envisage that bonds [either guaranteed by export credit agencies or otherwise] will continue to be used as part of our financing strategy as long as the pricing remains competitive".
Emirates has in the past issued bonds to finance aircraft purchase. The carrier in October 2009 announced the successful pricing of its inaugural US bond offering guaranteed by the Export Import Bank of the US (Ex-Im Bank) related to a loan facility secured for three new Boeing 777-300ER aircraft. The transaction was valued at $413.7 million (Dh1.51 billion) with a fixed rate coupon of 3.465 per cent per annum.
Emirates' total value of aircraft scheduled for delivery in financial year 2010-11 rests at $2.8bn (Dh10.29bn) at list prices, according to Jeffery, "and we have arranged finance for all of these".
The Dubai carrier earlier this month placed a historic order for 32 additional Airbus A380 aircraft worth $11.5bn at list prices. The order brings the carrier's total value of orders to more than $59.5bn. On order for Emirates at this point are 80 Airbus 380s, 70 Airbus 350s, 18 Boeing 777-300s and seven Boeing air freighters totalling 143 wide-body aircraft.
"No matter how many aircraft per year, we try to follow a strategy of diversifying both our funding sources and our financial products as much as possible," said Jeffery. He added that Emirates prefers to arrange fleet financing "well in advance" of each delivery date.
Meanwhile, the carrier in December 2009 raised $1.13bn to finance six A380 aircraft, with Citigroup and Doric Asset Finance having helped arrange the funding.
Emirates airline recorded a net profit of $964m for the financial year ending March 31. Whereas, Emirates Group overall posted a record net profit of $1.1bn for the year 2009-10 even as the global airline industry suffered heavy losses owing to the economic downturn.
