Emirates airline raises funding for 6 more A380s

AP News
Posted: Dec 10, 2009 5:53 AM

Emirates airline said Thursday it plans to receive its sixth Airbus A380 "superjumbo" next week and another before year's end after lining up more than $1 billion in financing.

The funding deal comes as other Dubai state-run companies are under increasing scrutiny over their willingness to pay back more than $80 billion in debt. Emirates, the Mideast's biggest airline and the world's top buyer of the A380, is fully owned by the city-state.

Emirates President Tim Clark said the carrier remains financially secure despite concerns over the health of other Dubai state borrowers.

"We have never encountered difficulties in obtaining finance for our aircraft acquisition program, with both international and regional banks comfortable with our financial stability," he said in a statement.

The carrier, he said, "has always honored its financial commitments" and is pressing ahead with its ambitious growth plans.

Emirates said it received a total of $1.13 billion in financing for six A380s from Citigroup Inc. and Doric Asset Finance. The funds will be used to pay for planes being delivered this year and next.

Toulouse, France-based Airbus' most recent price list shows A380s sell for an average of $327.4 million, though airlines usually negotiate steep discounts, particularly for bulk orders.

Emirates operates five A380s now and has 53 on order, by far the most of any airline. The fast-growing carrier also operates more of Chicago-based Boeing Co.'s long-range 777 model than any other airline.

It plans to use the A380 planes due this month on routes to Paris and Seoul, South Korea.

Concerns about Dubai-run companies' finances shot higher late last month when the emirate called on lenders to request a delay in repaying debt racked up by its main conglomerate Dubai World.

The company has since said it is trying to restructure some $26 billion in loans, while the government has said it would not guarantee the company's debt. Analysts fear the problem could run deeper and spread to other Dubai-owned companies.

Emirates, which is not part of Dubai World, has reported consistent profits for years, and is seen as more financially healthy than some of Dubai's other state-sponsored enterprises.

Risks remain, however. Clark told The Associated Press in an e-mail earlier this week that, like Dubai World's, none of Emirates' debts is guaranteed by the Government of Dubai.