Emirates stated it would invest USD10 billion p/a to fund its fleet expansion over three years but is not under pressure to access the bond market to fund the expansion (Gulf Times/Reuters/Arabian Supply Chain, 29-Apr-2011). Emirates Group President Group Services Gary Chapman stated the carrier expects to receive around 30 aircraft p/a over the next three years and has dropped plans for a bond to finance expansion after political unrest in the Middle East made rates more expensive. “Emirates has roughly 30 aircraft a year coming the next five years and a lot of them are A380s ... we will need about USD10bn a year,” Mr Chapman said. He also said the company has considerable cash reserves, and is not under pressure to look for funding, but would eventually access debt markets to support its capital expenditure programme when the pricing is right. Mr Chapman stated the company would look at dirham and dollar-denominated bonds. "There is lot of liquidity out there today in dirhams ... banks are flushed with dirhams. We will continue to explore that and we are looking at dollar bonds," he said. The carrier stated it would release its financial results for 2H2010 on 10-May-2011.
Emirates to spend USD10bn p/a to expand fleet
You may also be interested in the following articles...
Ex-Im Bank: its withdrawal can undermine 2nd and 3rd tier airlines. TAAG Angola Airlines case study
TAAG Angola Airlines is discussing with Boeing a potential acquisition of additional 737 aircraft which would be used to rightsize and grow its fleet. TAAG operates an all Boeing fleet and has traditionally relied on guarantees from the US Ex-Im Bank, which has an uncertain future under the administration of the new US President Donald Trump.
TAAG prefers to stick with the 737 to support regional growth and potentially replace some of its older model 777s. It is not yet considering other aircraft options – such as the Airbus A320, Embraer E190 or Bombardier CSeries families. However, TAAG and its government shareholder will have to consider other manufacturers – and other loan guarantees schemes – if Boeing does not come up with a viable financing alternative.
TAAG has completed an initial phase of a turnaround, posting a near break even result in 2016, but needs to change its fleet composition to position the airline for long term profitability. The government owned airline has too many 777s, given the limited size of its long haul network, and also needs to retrofit at least some of these aircraft as they are in an unideal three class configuration.
Emirates Athens-Newark fifth freedom adds to season of trans-Atlantic disruption; a test for Trump
On 23-Jan-2017, the first full business day of the Trump administration, Emirates announced it would start Dubai-Athens-Newark service on 12-Mar-2017, with a daily 777-300ER. Emirates' 12-Mar-2017 launch of service will undoubtedly add to the list of complaints from the big three US airlines – American, Delta and United.
The list of potential protective targets is growing as the new Administration settles in: renewing the fight against Gulf fifth freedoms while pursuing a blockage of DOT's grant of a permit to Norwegian Air International; Gulf airlines in their home market; and unfair access in China.
It is difficult to see the US airlines winning all of their claims. At worst, their mounting complaints will result in the details being lost as the new administration under Trump eyes indisputable wins with infrastructure and non aviation transportation matters. The loudest voices may be ignored until there is a full government in place to wade through the complainers.