(MENAFN- Khaleej Times) Emirates, the world's third-largest airline, announced on Monday that it has fully repaid a $550 million sukuk bond on its maturity date - June 18 - and hinted that Islamic financing would continue to play a key role for the fast-growing carrier moving forward.
The Dubai-based airline, which launched the world's first airline sukuk - also known as Islamic bond - seven years ago, reflects its strong financial position with its on-time repayment of the sukuk .
Emirates reported a net profit of $629 million - its 24th consecutive year of profits in the 2011-12 financial year.
"The repayment of our first ever sukuk bond is part of Emirates' varied financing strategy and reflects our robust financial position," said Shaikh Ahmed bin Saeed Al Maktoum, Chairman of the Emirates Group and Chief Executive of Emirates airline.
"Our consistent profitability and sound business model continue to ensure that we receive sufficient offers of financing to support our long term growth," said Shaikh Ahmed, who is also President of the Dubai Civil Aviation Authority. The Islamic bond was listed on the Luxembourg Stock Exchange, and was originally issued in 2005 with a seven-year term. "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," added Shaikh Ahmed. The airline said it uses a variety of financing options, including operating leases, EU/US export credits, commercial asset-backed debt, Islamic financing, conventional bonds, as well as sukuk.
Early in June, Emirates, already the world's largest airline in terms of international RPKs - the number of kilometres flown by revenue-generating passengers - raised Dh1.9 billion from an Islamic facility for the purchase of three aircraft.
The carrier completed the 12-year loan to buy planes including Boeing's 777-300ERs and Airbus' A380 with Dubai Islamic Bank, Al Hilal Bank and Ajman Bank. Dubai Islamic Bank also acted as the mandated lead manager for Emirates' sukuk bond issued in 2005. The issue was oversubscribed by almost 50 per cent, was closed at $550 million as originally targeted. It had a seven-year maturity period with a semi-annual coupon, except the first coupon which is payable in 12 months. Emirates, which is building the world's largest fleet of Airbus superjumbo jets and Boeing 777s to establish Dubai as a long-haul travel hub, keeps on expanding its fleet. Of the 51 million passengers Dubai airport recorded in 2011, Emirates accounted for more than 60 per cent at 31.4 million.
According to Sir Maurice Flanagan, executive vice-chairman of Emirates airline, the carrier is targeting to become the largest airline in the world by 2017. In November 2011, it signed a deal valued at $18 billion with Boeing.
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