Air Arabia secures A320 financing through 2015

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Middle East budget carrier Air Arabia secured financing for its Airbus A320 orders through 2015.

Air Arabia has signed a finance deal with a syndicate of two Gulf banks, Qatar National Bank (QNB Group) and Commercial Bank International (CBI), chief executive officer Adel Ali says in an interview with Flightglobal.

"The financing facility is to support the purchase of 10 new aircraft, which is part of a larger order for 44 A320s placed with Airbus in 2007. The aircraft will be delivered in 2014,” he says.

The banks are co-arrangers of the commercial loan facilities, covering the A320s scheduled to deliver next year.

Air Arabia carried three million passengers during the first half of 2013: a 16% increase compared with the 2.6 million passengers carried during the same period last year.

The Sharjah-based carrier forecasts a 12%-15% increase in passengers numbers for its current financial year. This will be followed by annual passenger increases of 7-8% during the next two to three years as "political instability continues to put a brake on traffic growth".

To support growth plans, Air Arabia say it will place a new aircraft order post-2016/17, when deliveries of the 44 A320s have been completed.

Ali told Flightglobal earlier this month that the carrier may end its reliance on an all-Airbus fleet by placing a Bombardier CSeries or Boeing 737 Max order.

Flightglobal's Ascend Online database shows that Air Arabia operates a fleet of 28 A320s.

Ali expects the carrier's full-year financial result to be "positive" and in line with its half-year result: a net profit of Dhs134 million ($36.4 million).