Etihad seeks funds for new aircraft

London: Officials of Etihad have been globe-trotting in recent weeks as they seek investors to fund the delivery of new aircraft, with bankers expected to submit proposals to the airline early next year.

The state-owned airline has been running through its business strategy with bankers in London, New York, Sydney and Tokyo with a degree of openness that's typically unusual for the unlisted airline.

"There's great opportunity for financing," Etihad Chief Financial Officer James Rigney said, including operating leases, export credit, tax leases and Islamic financing.

Forecasting that the airline will spend $15.8 billion (Dh58 billion) on aircraft and engines over the next 10 years, with $13.3 billion of that coming from external sources, Etihad wants to diversify the number of banks it taps and its geographical spread. "Etihad is a fairly new airline and while there is better awareness today than some years ago, it's necessary for us to explain the business plan, business performance and where we are heading and show we are hitting our numbers," Rigney told Dow Jones Newswires in an interview.

Its target for next year is to raise about $780 million to finance seven aircraft due for delivery in 2011, with a further $600 million needed in 2012 for four aircraft. It currently has seven aircraft in its fleet that are unencumbered, which debt could be piled onto when the timing is attractive.

The deliveries are part of an order for up to 205 commercial aircraft dating back to 2008, when Etihad surprised the aviation industry with a large order worth $43 billion for aircraft from both Airbus and Boeing.

Fleet orders

Over the next 10 years, Etihad plans to take delivery of six A330s by the end of 2011, 20 A320s by 2015, 10 A380s from 2014, 25 A350s between 2017 and 2020, 35 Boeing 787s between 2014 and 2020, and 10 B777s between 2011 and 2013.

"We expect [request for proposals] in the early part of the year and those wanting to participate will respond," Rigney said.

Since 2003, Etihad has raised $6.1 billion in capital, of which $4.6 billion was external debt from 40 banks and lessors.