Posted on: 06 November 2013 by Mark Howells
flydubai has signed an agreement for $228 million with five Gulf region and international banks to finance six new Boeing 737-800s, two of which were recently delivered, with one more scheduled for delivery by the year-end and three scheduled to be delivered in the second half of 2014.
The five banks which arranged the financing are Norddeutsche Landesbank Girozentrale (NORD/LB), Crédit Agricole Corporate & Investment Bank, Gulf International Bank (GIB), PK AirFinance Japan (GE Capital Aviation Services) and Landesbank Hessen-Thüringen Girozentrale (Helaba).
The commercial bank funding is structured as a finance lease with quarterly loan repayments over a 10 to 12 year term. The funding, the airlines reported, “is attractively priced to the market with an option for the interest rate to be floating or fixed during the term of the loan”.
“In 2012, our third year of operation, we started to diversify our sources of funding. The enthusiastic response to our RFP to source commercial funding is a positive endorsement of our strategy for continuing growth and our track record,” remarked flydubai’s chief executive officer, Ghaith Al Ghaith. “We thank the banks for their support and we look forward to strengthening our relationship with them in the future.”
Mukesh Sodani, flydubai’s chief financial officer, added, “We are delighted to have secured commercial funding to finance the acquisition of six new aircraft. Until we started our strategy to diversify our funding sources our aircraft were predominantly financed with operating lessor partners on sale and leaseback structures. Our first step towards diversifying our funding sources was for three Boeing 737-800s financed through a loan agreement with Export-Import Bank (Ex-Im Bank). With this announcement, we have successfully financed the acquisition of 42 aircraft to date, out of our initial order of 50 aircraft placed with Boeing.”