Gulf carriers self-funding more fleet orders - Boeing
Middle East airlines are increasingly opting to use their own funds to finance their fleet expansion plans, a senior executive from Boeing in-house finance arm said.
The Middle East is forecast to add around 2,370 new aircraft to their fleets over the next 20 years, US plane maker Boeing said earlier this year. As fleet sizes increase, Boeing said customers were increasingly being forced to turn to their own capital to fund orders.
"The region historically has seen about 20 per cent of its deliveries funded by its own capital sources. That turned up to more than 30 per cent in 2011, and, for 2012, it's heading to nearly 60 per cent,” according to Rich Hammond, a senior director at Boeing Capital Corporation (BCC).
The aviation sector in the Gulf had grown exponentially over the last decade, with Dubai International Airport set to overtake Hong Kong International Airport to become the third largest aviation hub in the world this year, with an estimated 11 percent rise in annual passenger traffic.
To facilitate this growth in passenger demand, oil-rich Gulf carriers are eager to quickly boost their fleets, with Dubai yet again leading the pack.
Last year, Emirates Airline placed an $18bn order for 50 Boeing 777s, marking the aircraft maker’s largest single commercial plane order.
The carrier, which is ramping up its expansion as it looks to rival European and Asian airlines, also optioned an additional 20 777s valued at $8bn.
“We have an ambitious and strategic plan to continue growing our international network and especially increasing our long-haul, non-stop routes. This order supports our fleet expansion and reiterates our commitment to operating a modern fleet for the benefit of our passengers and to ensure operational efficiency as well,” said HH Sheikh Ahmed bin Saeed Al Maktoum, chairman and CEO of Emirates Airline & Group.
Sheikh Ahmed said that the new planes would be financed via a mixture of EU and US export credit, commercial asset-backed debt and Islamic finance products.