Emirates said to be raising as much as $2.5bn for A380s
August 06 2016 11:07 PM
EMIRATES
An Airbus A380-800 aircraft displaying Emirates airline livery stands at the Airbus Group plant in Hamburg, Germany (file). Emirates will take delivery of 21 A380s in the fiscal year through March 2017.

Bloomberg/Dubai

Emirates, the world’s biggest airline by international passenger traffic, is seeking to raise as much as $2.5bn to fund the purchase of Airbus Group A380 superjumbos, according to two people with knowledge of the deal.
The Dubai government-owned carrier plans an 18-month bridge loan priced at about 135 basis points over the London Interbank Offered Rate, said the people, asking not to be identified because the information is private. The bridge facility will later be converted to a 12-year loan to fund about 10 A380s, which will be delivered before the year end, one of the people said.
Emirates, which has built Dubai as a hub for transcontinental traffic from the US and Europe to Asia, will take delivery of 21 A380s in the fiscal year through March 2017. Profit surged 50% in the financial year ended March 31 to Dh8.2bn ($2.2bn) as it carried more passengers and benefited from a decline in oil prices.
The funding for the planes is for a combination of operating and financial leases, according to one of the people. The airline is seeking short-term financing due to the lack of funding from the European export credit agency, although that is expected to become available over the next six to 12 months, said the people.
ECA-backed funding will replace the bridge facility when it’s available and some of the lenders will be repaid, according to the people.
“Emirates has received financing offers for all our new aircraft deliveries for the financial year 2016 and 2017,” an Emirates spokeswoman said in an e-mailed response to questions from Bloomberg.
“As part of our financing strategy, we continue to engage with various institutions for the financing of our future aircraft fleet, with a view to diversifying our sources of funding.”



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