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Dubai Islamic Bank (DIB) and Sharjah-based airline Air Arabia have signed an aircraft financing deal for US$230mn for the delivery of six new Airbus A320 aircraft in 2015
According to Air Arabia officials, the Ijara facility will finance the delivery of new aircraft every two months starting January 2015, and the final unit would be handed over by the end of the year.
Adel Ali, group CEO of Air Arabia, said, “We are glad to have our 2015 aircraft financing requirement done through a local Islamic bank, which reflects the trust and confidence we have in the local banking and finance industry. Two key elements of Air Arabia’s successful business model are our modern fleet of aircraft and efficient use of financing to support capital expenditure requirements.”
Adnan Chilwan, CEO of Dubai Islamic Bank stated that the Ijara facility is a milestone in their collaboration with Air Arabia, especially at a time when Islamic finance is gaining acceptance around the world and driving infrastructure development in a key market like aviation.
The A320 is a short-to-medium range, narrow-body, commercial passenger jet, which was introduced by Airbus in 1988 to compete directly with Boeing’s 737 model. Air Arabia had announced a fleet expansion project in 2007 and until now, the airline has received 29 of the 44 A320 aircraft it had ordered from Airbus.