Dubai, 29 October 2003 - Emirates has signed a lease financing agreement valued at Euros 195 million (US $226 million) for two new Airbus A340-500s, the world’s longest-range aircraft.
The Dubai-based airline will be the first in the world to offer this aircraft type to customers on non-stop services to Sydney, Melbourne and New York, among a number of longhaul routes.
The first A340-500 was delivered to the airline this week, and three more are due to arrive in November. Powered by Rolls-Royce Trent 500 series engines, they form part of a total of eight Airbus A340-500s for which Emirates has placed firm orders.
The financing, structured as a Euro operating lease over a 12-year term, was arranged by Crédit Agricole Indosuez combining export credit and commercial debt provided by Norddeutsche Landesbank Girozentrale, Lloyds TSB Bank, DekaBank Deutsche Girozentrale, Kreditanstalt für Wiederaufbau and Emirates Bank International, as well as Crédit Agricole Indosuez itself.
The export credit debt is guaranteed by the UK’s Export Credit Guarantee Department and its respective German and French counterparts HERMES and COFACE. The weighted average cost of funds was 0.8% over Euro Inter-Bank Offered Rate (Euribor).
Riyaz Peermohamed, Emirates’ Senior Vice President Corporate Treasury, said: “This substantial lease financing, combining export credit with commercial debt and supported by a range of international banks, is a continued vote of confidence in the airline. The Euro lease rentals will create a natural hedge against our substantial inflows from Euroland.
“We are pleased to be involved in this financing with Crédit Agricole Indosuez, which is one of the largest players in the aircraft financing world and has always been a long-term Emirates supporter.”
Emirates currently has 55 modern Boeing and Airbus jets in service—29 Airbus A330-200s, 12 Boeing 777-300s, nine Boeing 777-200s, one Airbus A340-500, one Airbus A310 and three Boeing 747 freighters.
As one of the world’s fastest-growing airlines, it already serves 71 cities in 50 countries in Europe, Middle East, Africa, Indian subcontinent and Asia-Pacific. Its Brisbane service started this week. It will shortly launch non-stop flights to North America.
Including orders announced at this year’s Paris Air Show, the carrier has outstanding commitments for new Airbus and Boeing jets worth a total of US $26 billion.
Its current orders include 45 Airbus A380-800s, 26 Boeing 777-300ERs, seven more ultra-long-range Airbus A340-500s, eight Airbus A340-300s and 20 Airbus A340-600 Higher Gross Weight aircraft. By the year 2012 Emirates expects to have 125 aircraft in service.