Air Arabia finances A320s with cash and ECAs

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Air Arabia will continue to use its cash position and use Export Credit Agencies (ECA) guarantees to finance this year's Airbus A320 deliveries.

The Middle Eastern budget carrier took delivery of six A320s in 2011 and will take another six this year.

The first aircraft, equipped with CFM56 engines, was delivered last month. Air Arabia will add five more aircraft in 2012 in May, July, September, October and December.

"The aircraft we receive every year are paid in cash and others financed with ECA support. This year, the mix will be the same," said a source at the carrier.

The banks guaranteeing the ECA transactions are The Bank of Tokyo and JP Morgan, confirmed Air Arabia.

Air Arabia's full-year net profit fell 11.5% to Dhs274 million ($74.6 million) in 2011. The carrier's revenues increased 16% to Dhs2.4 billion for the 12-month period ending 31 December 2011.