Tuesday, Jun 19, 2012

(This story was originally published Monday)

--Repays $550 million sukuk due June 18 in full

--Eyes more Islamic financing amid ongoing euro zone debt crisis

By Alex Delmar-Morgan

Of ZAWYA DOW JONES

DOHA (Zawya Dow Jones)--Dubai-based Emirates Airline said Monday it is eyeing more Islamic financing to help fund the $84 billion worth of aircraft it has on order because raising conventional finance has become difficult as European banks retreat amid the current debt crisis there.

"With the Eurozone debt crisis on-going it is likely that Islamic financing, with its large pool of liquidity, will play an increasingly important role for us moving forward," Sheikh Ahmed bin Saeed Al Maktoum, the chairman and chief executive of Emirates Airline and Group, said in a statement.

Middle East airlines have relied heavily on European banks in the past for commercial jet financing. Now, as fears mount about their exposure to indebted countries in the euro zone, some European lenders are pulling back and airlines in the Gulf are looking at alternative sources of funding for their rapid expansion.

Planemakers such as Boeing Co. last year urged Middle East banks to plug an anticipated shortfall in financing from European banks.

Emirates, the biggest customer for the Airbus A380 aircraft, said Monday it repaid a seven-year $550 million Islamic bond, or sukuk, in full that expired today.

The largest carrier by traffic said it used a variety of financing options, including operating leases, export credit agencies, conventional and Islamic bonds.

Emirates President Tim Clark told Dow Jones Newswires earlier in the month that debt markets had become tougher for all airlines and warned that international carriers were facing a "perfect storm" from high fuel costs, a slowing global economy and volatile exchange rates that could see many companies downsize.

At the end of March this year, Emirates said its order book was worth over $84 billion, including 84 long-range Boeing 777-300s.

-By Alex Delmar-Morgan, Dow Jones Newswires; +974 6659 9818; alex.delmar-morgan@dowjones.com; Twitter: @ZDJnews

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

19-06-12 0339GMT