flydubai secures US$228mn loan for purchase of six new aircraft

flydubaiflydubai's loan would cover the purchase of two recently delivered Boeing 737-800s, of one aircraft which is scheduled for delivery by end of 2013 and for three more which would be delivered in 2014. (Image source: flydubai)Dubai-based budget airline flydubai has secured a US$228mn loan from five regional and international lenders to finance its purchase of six new Boeing 737-800 aircraft

According to flydubai, the loan would cover the purchase of two recently delivered Boeing 737-800s, along with one aircraft which is scheduled for delivery by end of this year and for three more which would be delivered in the second half of 2014.

The five lenders for flydubai are NordLB, Crédit Agricole, Gulf International Bank, PK AirFinance Japan and Helaba Landesbank Hessen-Thüringen.

“The commercial bank funding is structured as a finance lease with quarterly repayments over a 10 to 12-year term,” flydubai said.

Last year, the budget airline issued a ‘request for proposal’ seeking funding for its purchase of new aircraft through 2013 and 2014.

flydubai’s network includes 65 destinations in the Middle East, the GCC, Africa, Europe, the Caucasus and Central Asia.

flydubai chief executive officer Ghaith Al Ghaith said, “During our third year of operations, in 2012, we started to diversify our sources of funding. We thank the banks for their support and we look forward to strengthening our relationship with them in the future.”

The airline’s chief financial officer, Mukesh Sodani, said, “Until recently, our aircraft were predominantly financed by operating lessor partners with sale and leaseback structures. Our first step towards diversifying our funding sources was for three Boeing 737-800 aircraft financed through a loan agreement with Export-Import Bank. So far, we have successfully financed the acquisition of 42 aircraft, out of our initial order of 50 aircraft placed with Boeing.”

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