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RPT-Dubai's Emirates sees no funding issues, solid '09
February 2, 2010 / 12:54 PM / 8 years ago

RPT-Dubai's Emirates sees no funding issues, solid '09

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* Exec says financing options attractive

* 2009 full-year performance to be “solid”

* No direct impact on business from Dubai World debt issues

By Tamara Walid

DUBAI, Feb 2 (Reuters) - Dubai government-owned Emirates airline [EMIRA.UL], the largest customer for the Airbus EAD.PA A380 superjumbo, said on Tuesday funding its aircraft purchases was not a problem and it would post solid results for 2009.

The Arab world’s largest airline, which has $55 billion of orders with Airbus and Boeing (BA.N), said on Monday it expected to take delivery of 11 aircraft in 2010 as it presses ahead with expansion into Europe.

“Financing aircraft is not a problem,” Gary Chapman, president Emirates Group Services and Dnata, told reporters in Dubai.

“We are getting very attractive financing opportunities with the credit export agencies that guarantee the debt and the margin we achieve on that makes it very competitive.”

Emirates, one of Dubai’s prize assets, in December raised $1.13 billion from Citibank (C.N), backed by a guarantee from the European Export Credit Agencies, and a second loan from Doric Asset to finance six aircraft.

Dubai has ring-fenced key assets from the $22 billion debt restructuring of state-linked Dubai World, including Emirates, as fears mount the debt problems are not limited to the troubled conglomerate.

The group is sitting on a “considerable” cash balance, Chapman said. “Dubai World has not directly impacted us.”

Emirates has about $3.1 billion of debt outstanding, according to Reuters data. The airline has a $500 million bond maturing in May 2011.

“We will look at the right opportunity at how to refinance that,” Chapman said, without elaborating.

The airline’s chairman Sheikh Ahmed bin Saeed Al-Maktoum, who also heads up Dubai’s fiscal committee, said in November he expected the carrier to make a profit of about 2 billion dirhams ($544 million) in 2009.

Emirates’ first-half revenues fell 13.5 percent but it bucked the industry’s downtrend in earnings, which surged 165 percent as costs fell.

“Given the way we are trading we expect solid results,” Chapman said on Tuesday.

The company, which implemented a hiring freeze during the global financial crisis, said on Monday it was recruiting cabin crew and pilots for its new planes as it looks to boost its European network to 25 destinations this year.

Middle Eastern airlines saw the highest growth rate of 11.2 percent in air passenger traffic globally for 2009 as carriers snapped up long-haul connecting traffic, international air traffic body IATA said on Jan. 27.

Writing by John Irish; editing by John Stonestreet

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