Emirates debt touches Dh36b, finance secure

Dubai : Emirates airline's gross debt stood at $9.9 billion (Dh36.3 billion) while its net debt as of yesterday rose to $8.2 billion (Dh30 billion) as it raised a further $1.13 billion (Dh4.1 billion) to finance six Airbus A380s, out of 53 ordered.

"At present we have 141 aircraft in our fleet and another 151 on order. Gross debt is $9.9 billion and net debt is $8.2 billion. Our debt is paid over a long term," President Tim Clark told Gulf News yesterday.

Emirates, the largest Arab carrier, yesterday said it has raised $1.13 billion (Dh4.1 billion) for Airbus A380 deliveries, in what is perceived to be a very difficult credit condition where loans are hard to come by.

Schedule

"Reflecting the airline's robust delivery schedule, Emirates will receive the first of these aircraft early next week, with a second arriving in late December and the remaining four A380s due for handover in 2010," the airline said in an e-mailed statement.

These six aircraft will form part of the 53 Airbus A380 aircraft that Emirates currently has on firm order. Prices of A380s start from $275 million, depending on specifications and deal size.

The carrier's current order book is worth $58 billion in book value. The company has a cash flow of $3 billion — enough to fund future acquisitions, Maurice Flanagan, Emirates Group Vice-Chairman, told Gulf News recently, as the airline expects more than 20 per cent growth in profits in the current financial year ending March 2010.

The financing for these six aircraft was arranged and funded under two separate finance agreements. The first agreement, covering three A380s, has been undertaken with Citibank, backed by a guarantee from the European Export Credit Agencies.

A second financing agreement has been arranged through Doric Asset Finance and covers the remaining three A380 aircraft.

Clark said: "Emirates remains in a secure financial position despite the global financial crisis. We have never encountered difficulties in obtaining finance for our aircraft acquisition programme, with both international and regional banks comfortable with our financial stability.

"As one of the world's most profitable airlines, Emirates has always honoured its financial commitments and we continue to progress with our rigorous fleet and network expansion plans."

Emirates will deploy the A380s on the Seoul route from December 14. Emirates will also receive its seventh A380 this month, scheduled to service the Dubai-Paris route three times a week from Dec-ember 29, becoming daily from January 17, 2010.

Although global credit conditions remain tight, the global aviation industry remains on growth mode.

The International Air Transport Association reported scheduled traffic results for October 2009 showing improving conditions.