ABU DHABI: Etihad Airways, the national airline of the UAE, has taken delivery of its first aircraft to be financed by a local UAE bank since 2008.
Abu Dhabi-based First Gulf Bank has provided the finance for two Boeing 777-300ER aircraft, to be delivered to Etihad Airways in 2013, through a Sharia-compliant “Ijara Muntahia Bittamleek” structure — meaning ijara ending with ownership, according to a press release by the carrier.
Ijara is an exchange transaction in which a known benefit arising from a specified asset is made available in return for a payment, but where ownership of the asset itself is not transferred.
The first of these two Boeing aircraft arrived recently at Abu Dhabi airport from Seattle and the second is expected to be delivered to Etihad Airways in May 2013.
James Hogan, Etihad Airways’ President and Chief Executive Officer, said: “The strong financial structure and performance of Etihad Airways ensures that the airline regularly attracts funding from banks and institutions from around the world, as well as from across the Gulf region.
“The financing of these two aircraft is an important development as it shows First Gulf Bank’s support of Etihad Airways’ fleet expansion as well as our commitment to working as much as possible with local UAE and Middle East-based banks.”
The total facility value offered by First Gulf Bank is approximately $359 million and it has a financing structure term of 12 years. Within the agreement, First Gulf Bank participates as the Initial Lead Arranger, the Underwriter, the Facility Agent and the Security Trustee.
Andre Sayegh, First Gulf Bank’s Chief Executive Officer, said: “As one of the leading banks in the UAE, we continuously demonstrate our commitment to the nation’s economy. Through our strong financial position; we are proud to support Etihad Airways as they expand their international reach and contribute to the UAE’s economic progress.
“We will continue to support businesses across the country and the region in our efforts to support development that maintains and bolsters the region’s growing role in the global economy.”
Etihad Airways issued a request for proposal (RFP) in September 2012 for the financing of nine aircraft scheduled for delivery in 2013. The RFP received a positive response from a large number of international banks, financial institutions and operating lessors.