Emirates has signed a GBP 62 million (USD $115 million) financing agreement with the National Bank of Abu Dhabi (NBAD) and Gulf International Bank (GIB) for a new Airbus A340-500 aircraft. This is the first aircraft to be funded by the two well known regional banks, signalling a strong vote of confidence in Emirates.Emirates’ latest A340-500, the world’s longest-range aircraft, is scheduled to be delivered before the end of this month and will be the airline’s seventh of this type. Powered by Rolls-Royce Trent 500 series engines, it will be followed by another three for a total of 10 Airbus A340-500s ordered by Emirates.
The financing, structured as a Sterling operating lease over a 12-year term, was lead arranged and funded fully by NBAD and GIB. The weighted average cost of funds was 0.9 per cent over six-month Sterling Libor.
Riyaz Peermohamed, Emirates’ Senior Vice President Corporate Treasury said: “We are very pleased to see this first time participation in Emirates funding by these two highly regarded Abu Dhabi- and Bahrain-based banks. This also supports our policy of opening up new, diversified sources of financing for Emirates.”
“We continue to follow a balanced portfolio approach towards hedging our currency risks. This is the fifth aircraft to be financed in Sterling and the twelfth aircraft to be financed in a currency other than USD. The Sterling lease rentals will create a natural hedge to some of our inflows from the United Kingdom.”
Emirates, the award-winning Dubai-based international airline, already has 71 Boeing and Airbus jets, including 29 Airbus A330-200s, 12 Boeing 777-300s, nine Boeing 777-200s, six Airbus 340-500s, eight A340-300s, one Airbus A310 and six Boeing 747 freighters.
The world’s fastest-growing intercontinental airline, Emirates flies to 77 cities in 54 countries with one of the youngest fleets in the skies. Emirates’ new services introduced in 2004 include: Lagos, Accra, Budapest (cargo-only), Glasgow, Vienna, Christchurch and passenger services to Shanghai and New York.
Emirates also recently announced that it will start passenger services to another four destinations in 2005 namely the Seychelles, Seoul, Hamburg (the airline’s fourth gateway to Germany) and Geneva (the airline’s second gateway to Switzerland.) The new routes will expand the Emirates network to 81 destinations by the end of next year.
Its order book includes 45 Airbus A380-800s, 30 Boeing 777-300ERs plus nine options, three more ultra-long-range Airbus A340-500s and 20 Airbus A340-600 Higher Gross Weight aircraft, amounting to a total of USD $28 billion. By 2012 Emirates expects to have twice as many jets in its fleet as it does today.