Qatar Airways seals lease finance deal

The airline has secured a US$500 million (Dh1.84 billion) loan to finance the arrival of new aircraft.

Qatar Airways has secured a US$500 million (Dh1.84 billion) loan to finance the arrival of new aircraft, as Gulf airlines show resilience in finding new debt amid a deteriorating banking climate. The Doha-based carrier looked beyond its borders for the lease finance deal and tapped a consortium of international banks for three Boeing 777-300 Extended Range aircraft, which it will use on long-range routes to the US, Europe and East Asia. The aircraft are part of the strategy of Gulf carriers to woo travellers away from European and Asian airlines on intercontinental fights, by offering them shorter transit times through the Gulf. Bank of Tokyo-Mitsubishi, BNP Paribas, Deutsche Bank, Standard Chartered Bank and Sumitomo Mitsui Banking Corp Europe participated in the 12-year lease deal, which was overseen by Standard Chartered. Akbar Al Baker, the chief executive of Qatar Airways, said the deal demonstrated the confidence international lenders have in the carrier "as an airline with a strong vision to grow its international network." The Qatar deal follows $250m in loans to Etihad Airways, sealed in September, to finance two new long-haul A340-600 aircraft from Airbus. The loans were arranged through a consortium of banks that included Al Hilal Bank, established this summer by the Abu Dhabi Investment Council. Etihad and Al Hilal are expected to announce a secondary financing pact later this month. Gulf airlines have signed deals worth tens of billions of dollars with Airbus and Boeing for new aircraft during the economic boom of the past few years. But with a global recession looming, there are concerns the carriers may find both passengers and credit harder to come by. Qatar Airways has more than 150 aircraft on order, including another 32 Boeing 777 deliveries worth $8bn coming in the next few years. Emirates Airline, with more than 200 aircraft on order worth an estimated $60bn, has said it will not need to go back to the markets for the next eight months. Etihad ordered up to 205 new aircraft from Boeing and Airbus this summer, worth up to $43bn if all options are exercised. [e-mail]