Low-cost airline flydubai has struck a deal with five regional and international banks for a $228m loan to fund the purchase of six new Boeing 737-800 jets.
The latest funding will be used for two recently delivered aircraft.
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One more aircraft is scheduled to be delivered by the end of the year, while the remaining three are scheduled for delivery in the second half of 2014.
This commercial bank funding is structured as a finance lease with quarterly loan repayments over a ten-year term, and is the result of a request for a proposal (RFP) issued by the carrier for its 2013 and 2014 aircraft financing requirements.
The five lenders include Norddeutsche Landesbank Girozentrale (NORD/LB), Crédit Agricole Corporate & Investment Bank, Gulf International Bank (GIB), PK AirFinance Japan (GE Capital Aviation Services) and Landesbank Hessen-Thüringen Girozentrale (Helaba).
flydubai chief executive officer Ghaith Al Ghaith said that in 2012, the company started to diversify its sources of funding.
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By GlobalData"The enthusiastic response to our RFP to source commercial funding is a positive endorsement of our strategy for continuing growth and our track record," Ghaith said.
Earlier, the funding sources for flydubai’s aircraft were primarily financed with operating lessor partners on sale and leaseback structures.
The carrier’s first step towards diversifying its funding sources was for three Boeing 737-800 jets funded through a loan from Export-Import Bank.
With the latest announcement, the airline has financed the acquisition of 42 aircraft to date, out of its initial order of 50 aircraft placed with Boeing.
Image: flydubai’s first step towards diversifying its funding sources was for three Boeing 737-800 jets funded through a loan from Export-Import Bank. Photo: courtesy of flydubai.
