Flydubai – Boeing in $320 million financing deal

Budget airline flydubai has struck a $320 million financing deal to buy four new Boeing 737-800 passenger jets.

The funding is part of a longer term plan that will eventually see 50 of the new aircraft costing $1billion added to the airline's fleet from a variety of funding sources.

The deal with GE Capital Aviation Services (GECAS) involves a sale and leaseback to the airline with two jets expected this month (July), one in October and the last in December.

The planes will be paid for by GECAS only on delivery and then leased to flydubai.

Ghaith Al Ghaith, flydubai chief executive officer, said: “This is a significant deal for flydubai as it is the first financing that we have secured from outside the UAE.''

He said the deal ensured the airline's financial needs for the remainder of 2009.

Once delivered the existing fleet will be brought up to six aircraft allowing the company to fly to 14 destinations.

Al Ghaith said: “We are proud to have GECAS as our partners and it just shows the confidence they have to invest in us.''

He said that the first month of operations had been “successful'' and had gone beyond expectations.
He added that the low-cost airline would explore other funding opportunities, which may include banks and other leasing companies sometime in the new year for future aircraft orders.

Doug Winter, GECAS senior vice-president regional manager for the Middle East, said: “We are delighted to have reached this agreement with flydubai.

“The planes will be paid for on delivery by GECAS and then leased to flydubai.''

Neither would go into details about the structure of the financing deal stating it was “commercially sensitive''.

The first two planes will be placed on new Indian routes to Lucknow, Coimbatore and Chandigarh as well as Aleppo in Syria beginning this month.

The firm currently operates four routes to Beirut, in the Lebanon, Amman, in Jordan, the Syrian capital Damascus and Alexandria in Egypt.

Under the flydubai system customers only pay for the services they want to be given.

Ticketing prices include all taxes and one piece of hand luggage, weighing up to 10kg, per passenger.