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Emirates requires USD28bn through 2017 to fund fleet expansion

1-Sep-2010 10:19 AM

Emirates President of Group Services in Charge of Finances, Gary Chapman, stated the carrier requires more than USD28 billion through 2017 to support its fleet expansion, almost double the amount raised since 1996 (Bloomberg, 01-Sep-2010). Mr Chapman added that financing requirements for the 12 months through Mar-2011 would be USD1.3 billion, and total approximately USD27 billion for the following six years. Emirates will take delivery of two aircraft each month for the next six years, prompting Mr Chapman to comment: “With the activity that we have coming up, we’ve got to leave no stone unturned.” He added that the financing plan is “substantial because it’s pretty close to double what we’ve done in the previous 14 years”. Mr Chapman said the carrier is considering all “customary financing vehicles” including going to the capital markets and enhanced equipment trust certificates, adding: “In an ideal world we’d like to get about 85% financing” from debt and the remainder from equity. He added that the carrier may repay some bonds or look at rescheduling them depending on financing costs. “We’re looking at our options, but you have to set it against the fact that we’re sitting on a cash pile of about USD3.4 billion,” he said. “We have the flexibility. We’re not going to be pushed into a corner.”