DAE Capital, the aircraft leasing and financial business arm of Dubai Aerospace Enterprise (DAE), said yesterday it has signed a financing agreement worth over $500 million (Dh1.83bn) with US-based Export-Import Bank, to support the purchase of 10 Boeing aircraft.
The financing deal will support the delivery of these aircraft by guaranteeing commercial loans or providing the loan itself, DAE said in a statement, adding that the aircraft will be allocated for purchase and leaseback agreements with Emirates and Garuda Indonesia.
DAE Capital in March had signed an operating lease agreement with Garuda Indonesia, the country's flag carrier, to dry lease eight Boeing 737-800 aircraft, with the deal involving sales and leaseback of eight new 737-800 aircraft due to be delivered from June 2009. [A dry lease, typically, is a leasing arrangement whereby an aircraft financing entity provides an aircraft without insurance, crew, ground staff, supporting equipment and maintenance.]
"In the current economic environment, leasing has become the most significant growth area in the civil aviation industry. Our aim is to play a more significant role in this area and contribute to the long-term sustainability of the industry," Dr Omar Bin Sulaiman, DAE Group Managing Director, said.
"Operating lessors such as DAE are playing an increasingly important role as purchasers of US-manufactured aircraft, and Ex-Im Bank's support for these transactions is a natural response to the changing market.
"Aircraft exports supported by this financing will help to maintain jobs in the US aerospace industry at Boeing, General Electric, CFM International, and their many suppliers throughout the United States," added Ex-Im Bank Board Member Bijan R Kian.
With an aim of rapidly growing its aircraft leasing business, DAE Capital plans to invest in a fleet portfolio with an estimated market value of $27 billion that will gradually encompass 100 Airbus A320 family and A350 XWB (extra wide body) aircraft, and 100 Boeing 737 Next Generation aircraft and wide-body planes, due to commence delivery in 2010. DAE's current fleet comprises 34 single-aisle and wide-body aircraft.
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