Emirates airline eyes Islamic finance as Europe banks baulk

 Emirates airline is looking at the more resilient Islamic finance market to fund aircraft deliveries as international banks back out of plane deals because of the euro zone debt crisis.

European lenders, especially French banks, which have been major financiers for Emirates' aircraft deals with Airbus and Boeing, have become risk-averse because of the crisis, the airline's president Tim Clark said.

"We were kind of planning for finance from European banks...but it's just a bit difficult now," said Clark.  "We still have the Islamic finance market to go with and other funding options are always open for us," he said, adding that issuing an Islamic bond or sukuk was "not out of the question".

Clark  said liquidity in the international loan market was lower and French banks were shying away from new deals. "This won't change for the next six to nine months," he said.

Societe Generale , France's second-biggest listed bank, on Tuesday scrapped its 2011 dividend to help bolster capital as it reported a 31 per cent drop in quarterly profit, hit by charges including Greek debt writedowns. Its chief executive said the bank would reduce its aerospace financing "very significantly".

Emirates is active in corporate funding markets because of its busy schedule of plane purchases; it received 10 new aircraft this year and a further 13 are scheduled for delivery before the end of March next year.

Emirates chairman Sheikh Ahmed bin Saeed Al Maktoum has said there is a good chance of the airline placing yet more orders at next week's Dubai Airshow.

However, Clark played down that idea. "We will book if we have a requirement and get good deals. Otherwise we won't," he said.

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