Dubai, UAE – The financial trouble in Dubai has not dented the expansion plans of Emirates Airline, which has managed to raise $1.13 billion for adding six new giant Airbus A380 aircraft to its fleet.
Emirates has had no problems in raising over $ 1.13 billion for financing the acquisition despite the financial turmoil in Dubai.
The first agreement, covering three A380 aircraft, has been undertaken with Citibank, backed by a guarantee from the European Export Credit Agencies (ECAs).
A second financing agreement covering the remaining three A380 aircraft has been arranged through Doric Asset Finance.
The airline run by Sheikh Ahmed bin Saeed Al-Maktoum made a net profit of $ 205 million, for the first six months of its current financial year ending September 30 this year. This represents a huge 165 per cent increase over the net profit of $ 77 million in the same period of 2008.
“Emirates has always honoured its financial commitments and we continue to progress with our rigorous fleet and network expansion plans,” said Tim Clark, president, Emirates Airline.
Source: India Today
By: rdc1000 - 14th December 2009 at 14:41
So is it fair to assume from this news that the “real” flyaway price on the A380 for Emirates is $183 million? (1.13B/6=183M)
Well not necessarily. Take the first three aircraft of this order, they are being financed by Citibank, but guaranteed by the European Export Credit Agencies. The latter will normally only guarantee loans of upto 75% of the value, so that then would value each a/c at $244m, although I suspect it’s somewhere between the two, although it depends what risk citibank are taking, if any.
By: Ship 741 - 14th December 2009 at 13:29
So is it fair to assume from this news that the “real” flyaway price on the A380 for Emirates is $183 million? (1.13B/6=183M)
By: Ren Frew - 14th December 2009 at 12:52
I think the title of this thread is a bit misleading as it insinuates that Emirates has done something out of the ordinary by ‘borrowing’ money to fund fleet development, which is not the case, and very few airlines purchase aircraft outright, most of them are financed by somebody else, it’s a bit like Hire Purchase on a car.
I suspect it may raise some eyebrows within the financial world because of recent headlines concerning the way a certain large Dubai operation has gone about it’s business, although clearly not connected to Emirates. I guess we’ll continue to see headlines and ‘threadlines’ like Steve’s here for a while to come.
By: rdc1000 - 14th December 2009 at 12:21
I think the title of this thread is a bit misleading as it insinuates that Emirates has done something out of the ordinary by ‘borrowing’ money to fund fleet development, which is not the case, and very few airlines purchase aircraft outright, most of them are financed by somebody else, it’s a bit like Hire Purchase on a car.
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December 14, 2009 at 9:18 am