Tuesday, May 24, 2011
(This story was originally published Monday.)
DUBAI (Zawya Dow Jones)--Dubai government-owned Emirates Airline, which is hoping to raise new debt, plans to have a total of 235 aircraft by 2017, adding 87 aircraft to its current fleet, as it expects more demand on existing routes and sees ample opportunities to tap new markets.
The "Emirates fleet is projected to increase by 87 aircraft from 148 in 2011 to a total of 235 by 2017 [resulting in a CAGR of 8%, in line with seat capacity growth]," Emirates said in a recent presentation to investors.
The Middle East's largest carrier has 21 aircraft due for delivery in financial year 2012 and 172 aircraft due for delivery thereafter, according to its preliminary prospectus for a planned dollar-denominated bond sale.
"As at 31 March 2011, the Group had capital commitments in respect of 21 aircraft due for delivery in financial year 2012 and 172 aircraft due for delivery thereafter. In addition, the Group held options on 50 further aircraft," the prospectus, dated May 19, said.
Emirates said it expects to continue to incur significant capital expenditure in relation to these deliveries in future years, reflecting its new aircraft delivery schedule.
The airline, which currently flies passengers to 100 destinations in 61 countries worldwide, said "there is still a significant number of airports with considerable traffic that are currently not served by Emirates."
Emirates said it intends to launch additional passenger routes to Geneva and Copenhagen and it has also announced flights to Buenos Aires and Rio de Janeiro, commencing in January 2012.
NEW DEBT
Emirates has mandated Deutsche Bank, Emirates NBD, HSBC Holdings Plc, and Morgan Stanley as lead managers on the new planned bond issue.
The notes are likely to be listed on the London Stock Exchange and the net proceeds of the issue will be used for general corporate purposes.
The "Government of Dubai is not guaranteeing the obligations of the Issuer under the notes," Emirates said in the prospectus.
The company is meeting fixed income investors in Hong Kong on Monday; Singapore on Tuesday; Abu Dhabi, Dubai on Wednesday; London on Thursday, Friday; and in Geneva, Zurich on May 30.
"The Group has significant off balance sheet liabilities in the form of commitments in respect of future aircraft deliveries as well as other capital and operational commitments and in respect of performance bonds and letters of credit granted by bankers in the normal course of business," the company said in the prospectus.
The Emirates Group's total borrowings and lease liabilities stood at $6.3 billion, according to prospectus. This figure comprised of term loans from commercial banks, bonds and sukuk issued in the international capital markets, bank overdrafts and liabilities under finance leases, principally to fund the purchase of aircraft and aircraft engines and parts.
Emirates Airline earlier this month posted a 55% surge in net profit for its latest fiscal year, boosted by double-digit gains in both passenger and cargo traffic. The airline recorded net profit of $1.5 billion for the year to March 31, compared with $964 million during the prior fiscal year. Revenues grew 25% to $14.8 billion.
-By Nikhil Lohade, Dow Jones Newswires, +9714 446 1694, nikhil.lohade@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
24-05-11 0347GMT
