Malaysian low-cost carrier AirAsia plans to secure further Islamic aircraft financing after obtaining long-term Shariah-compliant loans for some of the 60 Airbus A320s it has on order.
Speaking at the handover of AirAsia’s first A320 at Airbus’s headquarters in Toulouse, airline group deputy chief executive Kamarudin Meranun said the funding for the first 33 aircraft includes an innovative six-aircraft financing arrangement.
The deal has been specifically developed not only to comply with Shariah law, which forbids payment of interest, but also to extend the traditional short- to medium-term Islamic investment lending schedule. Kuwaiti Finance House and RHB Bank of Malaysia are behind the agreement.
The finance mix also includes 18 aircraft – nine deliveries to take place in 2006 and nine in 2007 – funded through low-interest export credit agency financing, arranged by a consortium of European banks.
Pure commercial loans, from the Royal Bank of Scotland and HSH Nordbank, will be used to finance the purchase of the other nine A320s to be delivered during 2006 and 2007.
Source: Flight International